Swiss Reinsurance Co. completed the acquisition of GE Insurance Solutions for $7.4 billion, surpassing Munich Re to become the world's largest reinsurer.

Swiss Re bought General Electric Co.'s reinsurance business for a total of $6.8 billion plus closing adjustments of $600 million, the Zurich-based company said today. Swiss Re financed the purchase, which was announced Nov. 18, through cash, a rights offer, mandatory convertibles and hybrid debt.

Swiss Re also paid $1.7 billion to General Electric for a ``cash capital contribution'' and earnings that the unit made between Nov. 18 and the closing date. The sum represents an increase in book value. GE now owns 8.9 percent of Swiss Re's share capital, Swiss Re said in a statement.

The transaction will lead to staff reductions in ``a number of locations,'' Swiss Re said without giving details. The company, founded in Zurich in 1863, operates in more than 30 countries.

GE Insurance Solutions will be merged with Swiss Re over the next 18 months, saving the company at least $300 million annually by the end of 2007, the Swiss reinsurer said. The acquisition, the company's largest ever, will add to Swiss Re's earnings as of next year, it also said.

Swiss Re shares have fallen 14 percent this year.

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Antonio Ligi in Zurich at  aligi@bloomberg.net

 
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