Fairfax Financial Holdings has raised the cash portion of its $US4.9 billion ($6.4 billion) cash-and-stock offer to acquire Swiss (re)insurer Allied World.

It will now pay $US28 ($36.50) cash – including a $US5 ($6.50) special dividend – per share to Allied World shareholders, instead of $US10 ($13) announced in the original offer.

The original offer comprised $US10 cash and $US44 ($57.30) in Fairfax stock.

Increasing the cash portion of the offer means Fairfax can “minimise the dilution to Fairfax shareholders”, Chairman and CEO Prem Watsa says.

Canada-based Fairfax has been growing its global insurance portfolio through acquisitions in the past two years, including buying AIG’s business in Latin America and Turkey.