Ace buying Chubb in cash-and-stock deal valued at $28 billion

Insurer Ace is buying The Chubb Corp. in a cash-and-stock deal valued at about $28.3 billion that will boost its international presence.

Chubb shareholders will receive $62.93 per share in cash and 0.6019 shares of Ace Ltd. stock. The price is a premium of about 30 percent over Chubb's Tuesday closing price of $95.14.

Ace shareholders will own 70 percent of the combined business, with Chubb shareholders owning 30 percent.

The combined company plans to use the Chubb name and will have its main offices in Zurich, Switzerland, where Ace is based. Chubb's Warren, New Jersey, headquarters will contain a substantial portion of the headquarters function for the combined company's North American unit. Ace will keep a significant presence in Philadelphia, where its current North American division headquarters is based.

Ace Chairman and CEO Evan Greenberg will serve in those roles for the combined company. Chubb President and CEO John Finnegan will serve as executive vice chairman for external affairs of North America.

The company's board will expand to 18 from 14 members, with the addition of four independent directors from Chubb's current board.

The acquisition is anticipated to immediately add to earnings per share, with about $650 million in cost savings by the third year after closing.

Both companies' boards unanimously approved the transaction, which is targeted to close in the first quarter of 2016. The deal still needs approval from Ace and Chubb shareholders.

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