Citigroup (C) - Get Report is acquiring the 15% stake of Travelers Property Casualty Group (TAP) - Get Report it doesn't already own for $2.4 billion in cash, the companies said Tuesday.

The deal values the shares of Travelers Property Casualty at $41.50 each, a 23% premium over the insurer's closing price Monday.

Travelers shares rocketed on the news, surging 7 1/4, or 21.5%, to close at 40 15/16 Tuesday. Citigroup jumped as well, rising 1 7/8, or 3.3%, to 58 1/16.

Travelers Group

spun off Travelers' property casualty group in April 1996, and Travelers sold 35.4 million shares of the company to the public at $25 a share. That deal followed Travelers Group's $4 billion acquisition of

Aetna's

(AET)

property casualty business, which it merged with its own property casualty business to create Travelers Property Casualty.

Hartford, Conn.-based Travelers Property Casualty insures both businesses and individuals.