Re/insurer ACE has revealed plans to acquire The Chubb Corporation for $28.3 billion.
The chairman and chief executive officer (CEO) of ACE, Evan Greenberg, will lead the combined entity. John Finnegan, chairman, president and CEO of Chubb, will serve as executive vice chairman for external affairs of North America and will assist with integration.
The combined entity, which will eventually use the Chubb brand, will remain a Swiss company with principal offices in Zurich.
Chubb’s headquarters in New Jersey will house a substantial portion of the headquarters function for the combined company’s North American division.
Under the terms of the transaction, Chubb shareholders will receive $62.93 per share in cash and 0.6019 shares of ACE stock. Based on the closing price of ACE stock on June 30, 2015, the total value is approximately $124.13 per Chubb share, or $28.3 billion in the aggregate .The consideration represents an approximately 30 percent premium to Chubb’s closing price of $95.14 on June 30, 2015.
Upon closing of the transaction, ACE shareholders will own 70 percent of the combined company, and Chubb shareholders will own 30 percent.
“We are thrilled to announce the acquisition of Chubb, a venerable company with a great brand,” said Greenberg. “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.
“We are combining two great underwriting companies that are highly complementary. We will make each other better and create a unique company in a class of its own that has greater growth and earning power than the sum of the two companies separately.”
John Finnegan, chairman, president and CEO of Chubb, said: “This is a compelling transaction for all Chubb and ACE stakeholders. The combination brings together two highly respected and successful companies with complementary capabilities, assets and geographic footprints.
ACE, Chubb, Mergers & Acquisitions, Evan Greenberg, North America, Europe, John Finnegan