Bermuda-based insurer ACE Ltd. confirmed on Friday it has finalised its agreement to buy New York-based reinsurer Capital Re Corp.

The company said in a statement that it expected to complete the transaction, which was announced last month, during the second half of this year.

Capital Re's shareholders are to receive 0.6 ordinary ACE shares for each share they hold subject to a maximum value of $22 per Capital Re share.

When first announced the deal was valued at $605.9 million when Capital Re shares were worth $18.90.

At Thursday's closing price for ACE shares of $27.875, the value had sunk to $16.725 per Capital Re share or $535.2 share for the 32 million outstanding shares.

The takeover plan for Capital Re was heavily suspected back in March when ACE revealed it was to buy roughly 11 percent of Capital Re for $75 million, signalling to many analysts the company was interested in a complete buy-out.

The full acquisition has widely been described as a "bailout'' since competition and reinsurance losses have weighed heavily on Capital Re since last year.

Despite ACE's announcement on Friday that the agreement was firmed up, it remains subject to customary closing conditions and regulations including approval by Capital Re's shareholders.

In January ACE revealed it was buying the international and domestic property and casualty insurance businesses of CIGNA Corp for $3.45 billion in cash.

That buy-out is expected to be completed by July 1.

ACE's path to growth The following are highlights of ACE's growth strategy. Dates reflect when announced, and not necessarily when acquired or formed; numbers in brackets reflect cost of purchase.

A.C.E. Insurance formed -- 1985 Acquires Corporate Officers and Directors Assurance Ltd. -- 1993 Starts product diversification with satellite coverage -- 1994 Adds excess property aviation and financial lines -- 1995 Purchase of Tempest Reinsurance ($641.7 million stock) -- 1995 Purchase of 51 percent of Methuen, a Lloyd's of London managing agent, and agreement to complete full acquisition by 2000 -- 1996 Purchase of Lloyd's underwriter Ockham Worldwide Holdings Plc. -- 1996 Formation of Sovereign Risk, a joint venture with X.L. Insurance Co. Ltd. to provide political risk coverage -- 1997 Opens up Dublin office, formation of ACE Insurance Co. Europe Ltd. -- September 1997 Purchase of Westchester Specialty Group ($338 million), holding company ACE USA formed -- January 1998 Formation of ACE Capital Re in joint venture with US-based financial guarantee company Capital Re -- March, 1998 Purchase of Bermuda-based CAT Ltd. ($711 million)-- April, 1998 Acquires majority of stock in Creditor Resources Canada Ltd. -- June, 1998 Purchase of Tarquin Ltd., a Lloyd's of London underwriter ($500 million) -- July, 1998 Airline Risk Consortium -- formed with Exel Ltd. and Overseas Partners Re Ltd.

-- September 1998 Alliance with Blackthorn Reinsurance Services, Inc. in US -- October 1 Purchase for $3.45 billion in cash of US-based Cigna Corp. international and domestic property and casualty insurance business -- January 1999.

Purchase of a 10 to 11 percent stake in Capital Re -- March, 1999.

Confirms announcement of purchase of Capital Re, pending shareholder and regulatory approval -- June, 1999.