ACE buys Aon subsidiary for 2.4 billion
– 21 December 2007
ACE INA Holdings of Delaware, a subsidiary of ACE Limited Cayman Island, has bought Combined Insurance Company of America (CICA) and its subsidiaries from Aon for $2.4 billion.
The figure is approximately double the projected equity of CICA at year-end 2007.
The acquisition will be financed through a combination of internal capital and public debt and is expected to close in second quarter of 2008. ACE will utilise $1.65 billion of existing cash and raise $750 million of senior debt.
The acquisition will exclude Sterling Life Insurance Company, currently a subsidiary of CICA. Current management of CICA is expected to remain in place. Post closing, all of the acquired subsidiaries will be restructured as sister companies and direct subsidiaries of ACE INA Holdings. The transaction includes a $325 million cash dividend payment to Aon and a restructuring of the investment portfolio to meet ACE's asset quality requirements.
...................................................................................................................................................................