NEW YORK (The Deal) -- Ace Ltd. (ACE) , a Zurich-based insurance giant, has agreed to acquire Warren, N.J.-based property and casualty insurer Chubb (CB) - Get Report for about $28.3 billion in cash and stock, Ace announced on Wednesday.

The deal is expected to close during the first quarter of 2016. Chubb shareholders will receive $62.93 per share in cash and 0.6019 shares of Ace's stock. Based on Ace's closing price on Tuesday, the total value is $124.13 per Chubb share, according to the announcement.

Ace shareholders will own 70% of the combined company and Chubb shareholders 30%. As of Dec. 31, the combined company had total shareholders' equity of almost $46 billion and cash, investments and other assets of $150 billion, according to Ace.

Shares of Chubb soared 28% to $121.81 on Wednesday, while Ace traded at $102.78, up 1%.

Ace said it plans to finance the cash portion of the transaction through a combination of $9 billion of Ace and Chubb excess cash plus $5.3 billion of senior notes with a range of maturities to be determined.

The combined company will be run by Ace Chairman and CEO Evan G. Greenberg, while Chubb Chairman and CEO John D. Finnegan will become executive vice chairman for external affairs of North America.

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Chubb is predominantly a middle-market commercial, specialty and surety insurer. Ace serves upper middle-market companies in the U.S. and has a presence in 54 countries.

An industry banker said it is very unlikely that this was a shopped deal, since there isn't a long list of potential acquirers that could have executed such a large transaction. However, Omaha, Neb.-based Berkshire Hathaway (BRK.A) - Get Report is understood to have considered buying Chubb, the banker said.

The deal could spur further industry consolidation. Other insurers seen as likely acquisition candidates include Bermuda-based Argo Group International (AGII) and Stamford, Conn.-based Navigators Group (NAVG) - Get Report, the banker said. Both companies offer "very fine" platforms and could serve as very good bolt-ons, he explained. As for potential acquirers, companies such as China-based Fosun International Ltd. and Tokio Marine Holdings (TKOMY) have been fairly active in U.S. markets and will likely continue to be so, he said.

Ace did not return calls for comment and Chubb declined to comment.

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