BY Richard Summerfield
British insurance firm RSA has agreed to be sold to Canada’s Intact Financial and Denmark’s Tryg in a $9.55bn cash deal.
The deal has won the unanimous approval of RSA’s directors who recommended the company’s shareholders vote in favour of the offer. The deal is expected to complete in the second quarter of 2021.
Under the terms of the deal, Tryg will pay around £4.2bn while Intact will contribute the remaining £3bn, with the overall offer representing a 51 percent premium to RSA’s 4 November closing share price of 460 pence. RSA shareholders will also receive a preannounced interim dividend of 8p per share, worth about £82m.
The proposed takeover would see RSA’s existing business broken up. Intact would gain RSA’s Canada, UK and international operations while Tryg would take the Sweden and Norway businesses. The consortium would co-own RSA’s Danish unit, though it will be managed by Intact while it explores strategic options for the business, including a sale or stock market flotation.
“The board of RSA is pleased to be recommending Intact and Tryg’s cash offer for the company, which delivers attractive, certain value for shareholders,” said Martin Scicluna, chairman of RSA. “RSA has provided peace of mind to individuals and protected businesses from risk for more than 300 years. However, I am confident that the values of our business, and not least our dedication to serving customers well, will be sustained as part of Intact and Tryg.”
“This acquisition is highly strategic for Intact,” said Charles Brindamour, chief executive of Intact. “It expands our leadership position in Canada, builds on our strong track record in specialty lines, and puts us in a solid position to strengthen RSA’s UK and Ireland operations. We have strong capabilities in data, risk-selection and claims management, which we plan to leverage across the business. I look forward to welcoming RSA’s employees into our company and leveraging their deep expertise across the business. Together, we are stronger and more resilient.”
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