Aon Corp. will ramp up its share buyback program and announced that it is selling its two insurance units for 2.75 billion dollars( 1.9 billion euros) in separate cash deals.
Ace Ltd. bought the company’s Combined Insurance Company of America for $2.4 billion (EUR1.65 billion), and Munich Re AG took up Sterling Life Insurance Co. for $352 million ( EUR242.6 million).
Aon said that Proceeds from the sales would increase Aon's share buyback power to $2.78 billion ( EUR1.92 billion), the AP reports.
"Our core assets will now be more strategically aligned as we expand our capabilities to better serve our risk brokerage and consulting clients," said Greg Case, president and chief executive officer. "At the same time, the increased share repurchase program reflects our ongoing belief in the underlying positive momentum of the business."
Aon expects to extract a one-time cash dividend from Combined Insurance of $325 million ( EUR224 million) before the deal closes.
Both Aon units will be placed into discontinued operations in the fourth quarter of 2007, the company said.
Ace Ltd., headquartered in Glenview , a suburb of Chicago , said it expects to close the deal in the second quarter of 2008.
Chairman and chief executive at Ace Evan Greenberg called the acquisition a "milestone" and an opportunity for considerable growth.