Insurer ACE will acquire property and casualty insurer Chubb in a cash and stock deal valued at $28.3 billion.
Chubb shares soared 35 percent on the news. (Get the latest quote here.)
Under the deal, Chubb shareholders will get $62.93 per share in cash and 0.6019 shares of Ace.
Based on the closing price of ACE shares on June 30, the deal is valued at about $124.13 per Chubb share, a premium of 30 percent to the stock's Tuesday close.
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.
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.