Aon Sells Insurance Companies

Aon said it plans to extract a one-time cash dividend of $325 million from Combined Insurance before the close of the deal. It expects total after-tax cash proceeds and dividends to be around $2.6 billion.

The proceeds of the transactions will go to increase Aon's stock repurchase program to $2.6 billion, bringing the total amount currently available for repurchase to about $2.78 billion, the company said.

ACE expects its part of the deal to be completed by the end of the second quarter 2008. It would be financed with $1.65 billion in case on hand and $750 million in notes, the company says.

At Munich Re, Peter Choueiri, a member of the firm's International Health Board, said, "Sterling gives us an important platform with an excellent reputation to gain access to the fast-growing senior markets in the U.S. and to leverage our existing business."

The transaction is to be paid out of its own funds and is expected to close during the first quarter of next year, said Munich Re, Germany.