Financial services firm Lincoln National ( LNC) reached a deal to acquire insurance company Jefferson-Pilot ( JP) for $7.5 billion.

The merged company will use the name Lincoln Financial Group and will provide life insurance, annuities and retirement services. Jefferson-Pilot stockholders will receive 1.0906 Lincoln shares or $55.96 in cash for each share they own.

Jefferson-Pilot shareholders are getting an 11% premium based on the average closing price of the companies' common shares during the last month.

The combined company expects annual savings of around $180 million before taxes. Philadelphia-based Lincoln believes the acquisition will modestly add to its operating earnings in the first year, building to 6% to 7% by the end of 2007.

The numbers exclude a pretax charge of about $180 million, most of which will be incurred during the two years after the transaction closes.

Jefferson-Pilot, based in Greensboro, N.C., was gaining $3.71, or 7.3%, to $54.50 in premarket trading. Lincoln was rising 77 cents, or 1.5%, to $51.50.

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