AXA, Europe's second-biggest insurer, has agreed to buy Bermuda-based XL Group for around US$15 billion, in a deal which AXA said would create a world leader in property and casualty insurance.
XL's shareholders will get $57.60 per share - a 33 per cent premium to the group's share price before the deal was announced.
The boards of AXA and XL Group unanimously approved the merger agreement.
"Together with the planned IPO of AXA's U.S. operations (expected in 1H 2018 subject to market conditions) and intended subsequent sell-downs, this transaction would gear AXA further towards technical margins less sensitive to financial markets", said AXA.
The combined entity now holds the number one global position in P&C lines with combined 2016 revenues of approximately €30 billion and total P&C revenues of approximately €48 billion. The group had $15bn of gross written premium (GWP) in 2017 and 7,400 employees.
Axa will fund the deal through 3.5 billion euros (£3.1 billion) in cash, six billion euros (£5.3 billion) from a planned United States stock market listing of its life and annuity business and three billion euros (£2.7 billion) of debt.
McGavick said: "With every confidence in how we have positioned XL Group for the future, it is a substantial testament to AXA's leadership and commitment to maintaining the XL Group brand and culture that we have come to an alignment".
"In our view, the acquisition of XL fits AXA's strategy of growing in commercial insurance".
Analysts at UBS said XL did not necessarily fit AXA's plans to grow in Asia, given XL's predominantly US -exposed business.
Axa added that the merging of XL's business with its own would complement and diversify its existing commercial lines portfolio, while bringing reinsurance capabilities that will open up access to alternative capital.
It added it expected the XL takeover to be cash accretive, and to result in cost synergies of around US$400 million per year, based on pre-tax earnings. He will report to reporting to Axa's CEO Thomas Buberl. He will be joining AXA Group's management committee. In this context, AXA also reaffirmed its Ambition 2020 targets.