It's a $28.3 billion insurance mega deal

Insurance provider Ace Limited is buying Chubb in a $28.3 billion deal, it announced on Wednesday.

The boards of both companies have agreed to the deal that will see Chubb shareholders receive $62.93 per share in cash and 0.6019 in Ace shares.

Chubb shares closed at $95.14 on Tuesday, and so the deal is about a 30% premium to that price. Ace's stock closed at $101.68 per share.

Ace shareholders will own about 70% of the new company.

"We are thrilled to announce the acquisition of Chubb, a venerable company with a great brand," said Evan G. Greenberg, Chairman and CEO of ACE Limited in the statement. "This transaction advances our strategy in a meaningful way and represents an outstanding opportunity to create significant value over a reasonable period of time for both ACE and Chubb shareholders."

Greenberg will be CEO of the new company, while Ace chief executive John Finnegan will be an executive vice chairman for external affairs of North America.

The companies estimate that they'll save about $650 million pre-tax as a combined entity.

The deal is expected to close in the first quarter of next year.

More to come...