13.37 billion Swiss francs ($8.78 billion) in stock, becoming the latest international bank to expand into other financial services.

Winterthur, a full service insurance company, has had a physical presence in Bermuda at the Corner House on Parliament Street, Hamilton since 1994.

The company has been registered here since 1982, and in 1989 formed Winterthur International Services Ltd., whose managing director is Windsor Ironside.

Meanwhile, Credit Suisse, Switzerland's second-biggest bank also said first-half profit rose 70 percent to 1.41 billion francs, or 7.25 francs per share, boosted by soaring financial markets and the weak Swiss franc. Profit was 830 million francs, or 4.40 francs per share in the first half of 1996.

The move is the latest attempt by an international bank to broaden its activities after ING Group, the largest Dutch financial company, said last month it will buy Equitable of Iowa Cos. for $2.6 billion, doubling its US life insurance and retirement saving business.

"Strategically, this makes a lot of sense,'' said Daniel Hunziker, who manages 1.9 billion francs of assets at Union Bank of Switzerland. The question is how much Credit Suisse will gain from the acquisition, and how quickly it achieves that.'' Credit Suisse Chief Executive Officer Lukas Muehlemann told journalists funds controlled by Swiss investor Martin Ebner, which own about 25 percent of Winterthur, had accepted the offer. Winterthur is Switzerland's second-largest insurer.

Credit Suisse is offering 7.3 of its shares for every Winterthur share, valuing each share at 1,500.5 francs based on CS's share price of 205.5 francs. Winterthur shares fell 21 francs, or 1.5 percent, to 1,492, while CS fell 1.7 percent.

Speculation that Winterthur and Credit Suisse will deepen their cooperation has regularly surfaced since the two financial services companies announced a joint venture to sell combined banking and insurance products in late 1995.

Credit Suisse said the acquisition will generate savings of between 300 million and 350 million francs within three years, an estimate that disappointed some analysts.

"The figures are too low,'' said Beat Alpiger, an analyst at Bank Julius Baer & Co. "I would like to have seen savings of between 500 million and 600 million francs.'' Analysts expect Credit Suisse and Winterthur to post combined full-year profit of 3.02 billion francs, according to a consensus forecast, Credit Suisse said.

The estimate for 1998 is 3.486 billion francs, which includes a 96 million franc saving from the acquisition.

This year, Winterthur shares have risen 93 percent, the best performance in the benchmark Swiss Market Index, amid speculation Switzerland's second-largest direct insurer could be bought as the industry continues to consolidate. Zurich Insurance is Switzerland's largest insurer.

Credit Suisse buys Winterthur Kurt Schildknecht, spokesman for Martin Ebner, said the Credit Suisse Group's offer price is "fair.'' When the offer is completed, Ebner's funds will own between six and seven percent of Credit Suisse, Schildknecht said.

Ebner has told a Swiss newspaper his funds hold "about 25 percent of (Winterthur's) shares, and with the shares of our customers, we have about 30 percent altogether.'' In a letter to shareholders, Ebner's BZ Trust AG said the funds, which include BK Vision and Stillhalter Vision, wanted a share "of more than 50 percent'' in Winterthur "in the long term.'' Schildknecht said Ebner's group told Winterthur last month it is striving for a majority stake in the insurer. `We told Winterthur we wanted to have as big a stake as possible so that we would have a say-so in company strategy,'' Schildknecht said.

Analysts say that might have pressured Credit Suisse to move now. Still, analysts said Credit Suisse is likely to benefit from the takeover. "Credit Suisse is getting a better product range,'' said James Hyde, a bank analyst at Merrill Lynch.

In a statement, Credit Suisse Chief Executive Lukas Muehlemann described the acquisition of Winterthur as "a powerful, forward-looking response to developments in the financial services market.'' Credit Suisse said it plans to cut a maximum of 500 jobs at the enlarged company after the acquisition.