the weekend hammering out the final details of the $3 billion-plus purchase of a giant US insurers property-casualty insurance business.

The sale of Philadelphia-based CIGNA Corporation's domestic and international property-casualty insurance business to ACE could be announced early next week, sources familiar with the situation said.

CIGNA and ACE late last month confirmed they were in talks, saying they expected the final purchase price to be materially in excess of $3 billion.

They have declined further comment.

Shares of CIGNA rose $1.81 to $83 on Friday. Shares of ACE rose $0.94 to $33.19.

The deal is expected to include a mix of cash, stock and debt, sources said.

In addition, as a part of the deal, ACE was expected to seek a reinsurance contract to protect it from unexpected losses from CIGNA's old asbestos and environmental business.

The discontinued pollution business was moved into a new unit, Brandywine Holdings, in 1996 to separate it from INA Holdings, CIGNA's profitable property-casualty insurance business.

The more than $3 billion purchase price would include the price of any stop-loss reinsurance contract, which could cost anywhere from about $300 million to $500 million, sources said.

Therefore, excluding the cost of the reinsurance, proceeds to CIGNA might be closer to $3 billion, sources said.

Sanford C. Bernstein analyst Weston Hicks estimated the book value of the domestic and international businesses at about $2.5 billion.

The reinsurance contract, which could be similar to the one included in ACE's acquisition of Westchester Speciality from Xerox Corp, was seen as critical to making the deal work for ACE, analysts said.

Such a reinsurance transaction would allow ACE to move Brandywine's reserves offshore and take advantage of Bermuda's tax-friendly environment.

ACE also was expected to keep the current management of CIGNA's property-casualty insurance business, sources said.

For ACE, the acquisition would mark a major expansion of its US operations.

As a Bermuda-based company, ACE has been unable to solicit business from major US companies, Hicks said.

And CIGNA is only one of a handful of US property-casualty insurers with significant international property-casualty operations as well, he said.

But the deal may face extra scrutiny from regulators given the ongoing controversy over CIGNA's creation of Brandywine to house its money-losing environmental business.

Legal objections to that move still have not been resolved and analysts said regulators will want to be reassured that Brandywine will be adequately backed through the reinsurance before they approve any deal. -- Reuters