Insurance provider Lincoln National Corp. (LNC) on Monday said it has agreed to acquire insurer Jefferson-Pilot Corp. (JP) for about $7.5 billion in cash and stock.

The deal would combine Lincoln's strengths in life and annuities products with Jefferson Pilot's sizable presence in fixed and variable universal life and fixed annuities (search), including equity-indexed annuities (search) and other insurance. The companies said the deal will make Lincoln National the top-ranked seller of universal life product sales, as well as a leading player in group disability sales and retirement plan assets.

Lincoln National Chief Executive Officer and Chairman Jon Boscia will serve as chairman and CEO of the newly combined company, while Jefferson Pilot CEO Dennis Glass will serve as president and chief operating officer and as a member of the board.

The 15-member board of directors of the combined company will comprise eight Lincoln members and seven Jefferson Pilot members. Jefferson Pilot shareholders will own roughly 39 percent of the combined company.

Under terms of the deal, Jefferson Pilot shareholders will receive 1.0906 Lincoln shares, a cash payment or a combination of shares and cash valued at $55.48 for each Jefferson Pilot share they own.

The combination offer represents an 9.2 percent premium over Jefferson's Friday closing price of $50.79 on the New York Stock Exchange.

Jefferson Pilot shares rose $3.81 to $54.60 on the New York Stock Exchange (search), while Lincoln National shares slipped 22 cents to $50.51.

The deal is expected to close in next year's first quarter, pending shareholder approval on both sides and other customary conditions.