Swiss property and casualty insurer ACE Limited has signed a definitive agreement to acquire Chubb in cash and stock deal valued at $28.3bn.
Under the terms of the agreement, Chubb shareholders will receive $62.93 per share in cash and 0.6019 shares of ACE stock.
After the completion of transaction, ACE shareholders will own 70% of the combined company, which will operate under the Chubb name globally, while the remaining 30% will be held by Chubb shareholders.
Essentially a Swiss company with principal offices in Zurich, the company will be a global leader in commercial and personal property and casualty (P&C) insurance, with complementary products, distribution, and customer segments, underwriting discipline and enhanced claims service.
A substantial portion of the headquarters function for the combined company’s North American Division will be housed at Chubb’s headquarters in Warren, New Jersey, US.
ACE chairman and CEO Evan Greenberg said: "This transaction advances our strategy in a meaningful way and represents an outstanding opportunity to create significant value over a reasonable period of time for both ACE and Chubb shareholders.
"The data and insight we will gain from our respective skills and experience will allow us to do so much more.
"For example, Chubb will enhance ACE’s ability to serve the upper middle market, while ACE will provide more products to serve Chubb’s middle market clients, and our combined strengths will enable us to pursue the small and micro markets globally."
ACE provides a broad range of products and services for industrial commercial, multinational and upper middle market companies with distribution n the US commercial lines business, through a major brokerage presence.
Chubb is primarily a middle-market commercial, specialty and surety insurer with a wide product portfolio and a major agency presence.
The new company will be led by Greenberg, while Chubb chairman, president and CEO, John Finnegan will serve as executive vice chairman for external affairs of North America.
Subject to approval by ACE and Chubb shareholders, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and regulatory approvals, the transaction is expected to close during the first quarter of 2016.
Image: ACE Limited’s headquarters in Zurich, Switzerland. Photo: © 2015 ACE Group.