RBC Capital Markets On ACE's $28.3 Billion Acquisition Of Chubb

ACE Limited (NYSE: ACE) and Chubb Corp (NYSE: CB) announced on Wednesday that the former will be acquiring the latter in a $28.3 billion cash and stock deal. As part of the deal, Chubb shareholders will receive 0.6019 ACE shares for every Chubb share and $62.93 in cash.

Mark Dwelle, RBC Capital Markets analyst, was on CNBC recently to weigh in on this deal.

A Global Power

"Definitely a transformative deal for ACE," Dwelle began. "I mean, Chubb is a leading commercial insurer and they are known as one of the very best companies for high net worth personal lines businesses. ACE is a key player in North America in both of those deals.

"But brings together a company that really is now a global power. They are up in the echelons, bigger than AIG now from a commercial insurance standpoint, in the realm with some of the large Japanese insurers and the large European insurers."

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Tax Savings

He continued, "There's probably some degree of tax saving to this. ACE is domiciled in Switzerland and that's where the combined companies will be domiciled. I don't think that's the primary motivator here though. I think, this is the opportunity to pull together two very strong franchises in each and every aspect of markets, and then make one franchise that is truly a global player almost unrivaled by anyone else."

Valuation

On the valuation that this deal was done, Dwelle said, "Pretty attractive valuation, and one that Chubb hasn't seen in a very long time."

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