Chubb's board has recommended that shareholders accept the offer, equivalent to 75 pence per share, describing it as "fair and reasonable".

Under the terms of the deal, UTC - which makes Otis lifts and Black Hawk helicopters - will also assume Chubb's debt burden, which stood at $934m in April.

"Chubb fits directly into UTC's business mix and acquisitions strategy," said George David, chairman and chief executive of UTC.

"The company is a market leader in commercial security services and fire protection, and these businesses have substantial markets."

Revamp

After starting out as a lock making business in 1818, Chubb has been remodelled as a security services business offering services such as fire detection, CCTV and video entry systems.

Speculation about its future has persisted since takeover talks with security firm Securitas broke down last year.

Chubb announced in April this year that it had been approached by UTC about a possible takeover bid.

But a week after the announcement, it issued a profit warning.

The company said it had seen trading in Asia hit by the deadly Sars virus and that its US-based hotel locks business Onity was struggling in the US economic downturn.

Announcing the deal with UTC, Chubb's chairman Sir Robert Hornton said: "We believe that there is considerable long-term potential in the Chubb Group and we have a clear strategy to deliver it.