acquisition of Capital Re for an estimated $511 million.

Shareholders at Capital Re rubber stamped the deal yesterday when they voted to accept the terms offered by ACE in a cash and stock deal.

ACE said it would pay $16.24 per ordinary share and issued approximately 20.8 million ordinary shares, and paid out approximately $110.3 million in cash in the transaction.

Brian Duperreault, chairman and chief executive officer of ACE, said: "This transaction adds significant depth and expertise to ACE's financial reinsurance capabilities and represents a strategic complement to our diversified book of business.

"The acquisition of Capital Re establishes ACE as one of the premier financial guaranty reinsurers.'' Jerry Jurschak, president and chief executive officer of Capital Re, said: "Capital Re is pleased to complete its merger with ACE Limited. Our positive business environment for reinsuring financial products is significantly furthered by ACE's broad product offering, substantial balance sheet, and worldwide presence.'' Dominic Frederico was appointed chairman of Capital Re Corporation yesterday.

In commenting on the transaction, Mr. Frederico said, "Capital Re will facilitate ACE's product development to meet the diverse needs of today's marketplace and further enhance our capabilities to address the convergence of financial products and insurance products.'' The deal ends a battle for Captial Re that started in October between ACE and its arch rival XL Capital.

The fight for the relative minnow stopped the free-fall in Capital Re shares and with every dramatic turn the company's share price has been hiked up even further.

ACE originally agreed to buy Cap Re in June in a deal in which Cap Re shareholders would swap their shares for 0.60 shares of ACE.

That deal originally valued Cap Re at about $18.90 a share, or $606 million.

But ACE's original offer lost about half of its value, dropping to just $10.54 a share, or about $385 million after a drop in share price.

XL then muscled in by offering $12.50 a share cash and then bumped the bid up to $13 a share cash. ACE twice raised its bid to match XL's bids.

In November XL announced that, for the moment, it would not be offering any higher bids for Cap Re.

Cap Re is a specialty reinsurance group providing innovative solutions to problems of financial risk and risk management.