ZURICH, Switzerland, Nov. 18 (UPI) -- Swiss Re, world's biggest life and health reinsurer, said Friday it was paying $6.8 billion for GE Insurance Solutions, the fifth-largest reinsurer.
The deal, comprised of cash, stock and other securities, will result in the Zurich-based company having estimated combined revenues of $34.7 billion and assets of $200 billion.
Swiss Re said the price was 76 percent of the approximately $8.9 billion book value of the Kansas City, Mo., operation, a long-time money-losing venture that comprises most of GE's insurance business.
GE, which will post an after-tax loss of $2.8 billion on the deal, also said it was hiking dividends by 14 percent and increasing stock buybacks from $15 billion to $25 billion through 2008.
Since 2002, GE has divested $25 billion worth of insurance assets.
As part of the deal, GE Insurance Solutions will provide about $3.4 billion pretax in additional reserves.
Swiss Re expects to raise up to $7.5 billion, which includes as much as $5.5 billion in shares and notes of which GE will buy between $3 billion and $3.8 billion. In addition, Swiss Re will raise about $2 billion in "hybrid" securities.
