European insurer Axa is to buy rival Winterthur for 7.9bn euros (£5.4bn; $9.9bn) to expand in Europe and Asia.
The insurance business is facing interesting times, analysts say
Axa, Europe's second-largest insurance company, said it would pay cash to buy Winterthur, a division of investment bank Credit Suisse First Boston.
The deal should start having a positive effect on Axa's earnings from 2007.
Insurers are looking to merge, expand and cut costs in the face of increased competition and uncertainty about the size of future claims, analysts said.
Moody's Investors Service was positive about a tie-up between Axa and Winterthur citing access to new markets and "sizable cost synergies".
Axa expects pre-tax savings of about 280m euros, and said it will take a restructuring charge of about 520m euros.
"This transaction is a unique opportunity to reinforce our leading position in our core European market and to increase our presence in high growth markets, notably in Central and Eastern Europe and in Asia," said Henri de Castries, Axa's chief executive.
Winterthur is the second-biggest firm in the Swiss insurance sector and operates in 17 countries.
Axa has stated in the past a willingness to expand via acquisitions and in 2004 bought Mony Group.
The purchase of Winterthur still needs regulatory approval, but is expected to go through by the end of this year.