Shearman & Sterling is representing Fairfax Financial Holdings Limited in its planned acquisition of First Mercury Financial Corporation in a transaction valued at approximately $294 million. The transaction is subject to customary conditions, including approval by First Mercury’s stockholders and regulatory approvals, and is expected to close in the first quarter of 2011.

Fairfax is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. First Mercury provides insurance products and services primarily to the specialty commercial insurance markets, focusing on niche and underserved segments.