(Bloomberg) — Nationale Suisse shares soared to the highest in almost 25 years after Helvetia Holding AG won a bidding contest to buy the company, valuing it at about 1.8 billion Swiss francs ($2 billion) and creating Switzerland's third-biggest insurer.

Nationale Suisse, which said it was pushed into a takeover by its largest shareholders, rose 25% to 79.20 francs at 2:30 p.m. in Zurich trading, the most since December 1989. Helvetia shares dropped 0.3%.

The new combined group, which will have about 9.1 billion Swiss francs in premiums, will allow Helvetia to supplant Baloise Holding AG as Switzerland's third-largest insurer. The transaction could result in higher profits and dividends for shareholders, St. Gallen, Switzerland-based Helvetia said at a news conference in Zurich today.

“The combination of the two insurance groups is the natural fit, but the price paid appears on the high side,” Stefan Schuermann, a Zurich-based analyst with Vontobel Holding AG, wrote in a note to investors. “We expect the deal to go through and prosper under the strong Helvetia brand name.”

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