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The Federal Trade Commission (FTC) has given the green light to ACE Limited’s $28 billion acquisition of rival insurer Chubb Corp.

In a regulatory filing, ACE reported that it received notice on Sept. 30 from the FTC that it had granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for ACE’s pending acquisition.

After the deal closes, the balance sheet’s size and strength will elevate the combined company into the elite group of global P/C insurers. As of December 31, 2014, on an aggregate basis, the combined company had total shareholders’ equity of nearly $46 billion and cash, investments and other assets of $150 billion.

The two firms have said the combined company will have complementary businesses, skills and distribution and greater growth and earnings than the two companies separately.

ACE noted that while the FTC action satisfies one of the conditions for closing, the deal still must receive shareholder and other regulatory approvals. The boards of directors of both companies have already approved the deal.

The firms expect to close during the first quarter of 2016.

Nomura analyst Cliff Gallant, who follows ACE, said the integration of the insurers is “on track.” He also said management remains confident in projected cost savings of $650 million by 2018 and also that ACE has been “pleasantly surprised to see, upon closer review, even more growth synergies.”

Peter D. Hancock, American International Group (AIG) president and chief executive officer, has noted that the deal will reduce the number of carriers in certain markets. “It does create opportunity in terms of customers, talent and a slight shift in the balance of power between carriers and brokers” given there will be fewer carriers in the market, Hancock said in August.

AIG’s Private Client Group serves the high-end personal lines market that is also targeted by both Chubb and ACE, which further strengthened its position last year when it took over the high net worth business of the other major carrier in the space, Fireman’s Fund. Thus the number of larger insurers serving this market will be down to two.

Chubb and its bankers have said they did not seek competing offers before agreeing to the ACE $28 billion offer, which was 30 percent higher than the company’s closing price on the day before the deal was announced. Chubb shareholders are due to receive $62.93 in cash and 0.6019 share of ACE stock for each share they own.

The merged company will assume the Chubb corporate name.

The combined company will remain a Swiss company with principal offices in Zurich.

ACE CEO Evan Greenberg will assume leadership of the new entity. Chubb CEO John Finnegan, who planned on retiring at the end of 2016, will serve as executive vice chairman for External Affairs of North America and will assist with integration.

The company’s board will be expanded from 14 directors to 18 directors with the addition of four independent directors from Chubb’s current board.

ACE has been naming its post-acquisition management teams for business units and product lines, North America, field management and regions, and others. Nomura’s Gallant said the firm expects to have all key operating structures finalized by the closing.

Topics Carriers Chubb