The FINANCIAL — According to Dow Jones, Aon Corp. (AOC) agreed to sell its Combined Insurance Co. unit and certain other subsidiaries to Ace Ltd., a Hamilton, Bermuda, insurer, for $2.4 billion in cash.
In a statement on December 17, Ace said that Combined is a Glenview, Ill., provider of specialty individual accident and supplemental health insurance to middle-income consumers in the U.S., Canada, Europe and Asia.
Ace said the deal, to be financed with cash on hand and new debt, doubles its personal-accident and supplemental-health offerings.
Prior to the closing, expected by the end of the second quarter, Aon predicts it will extract a one-time cash dividend of $325 million from Combined Insurance.
In a separate release, Ace Ltd. said it expects the transaction to add to its earnings.
In addition, Aon agreed to sell its Sterling Life Insurance Co. to Munich Re Group AG (MUV2.XE) for about $352 million in cash.
Aon, a Chicago insurer, said it will devote the proceeds of both transactions to an increase in its previously authorized share buyback program. The program will increase by $2.6 billion, bringing its repurchase amount to about $2.78 billion, Aon said.
