Bermuda-based specialty lines insurer Axis Capital will acquire Novae after offering £467.6 million ($797 million) for the London-listed group.

Axis says the deal will create a $US2 billion ($2.6 billion) player in the London specialty market and combine two complementary businesses.

Novae, a diversified property and casualty insurer operating through Syndicate 2007 at Lloyd’s, is recommending the offer to shareholders.

“Novae has made significant progress on a standalone basis in developing its underwriting franchise and growing premiums in its targeted lines of business,” Chairman John Hastings-Bass said. “However, it remains a relatively small player in a global industry.

“Axis is a substantial and successful business that represents an excellent partner for the Novae business, its customers and employees.”

In Australia, Novae is one of three syndicates used by Nova Underwriting, a specialist in professional, management and financial lines.

Nova Underwriting MD Malcolm Fletcher told insuranceNEWS.com.au it is premature to comment on the Axis deal.

The acquisition is expected to be completed in the fourth quarter, subject to a vote by Novae shareholders and regulatory approvals.