RSA agrees to £7.2bn takeover — one of Europe's largest bids this year

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
A sign of RSA insurance company is pictured outside its office in London December 13, 2013. RSA's chief executive Simon Lee has quit after the insurer warned on profits for the third time in six weeks, prompting the chairman to initiate a review that could lead to the sale of part of the business. REUTERS/Toby Melville (BRITAIN - Tags: BUSINESS LOGO)
RSA is best known for its More Than car insurance brand in the UK but has operations all over the world. Photo: Toby Melville/Reuters

FTSE 100 (^FTSE) insurance giant RSA (RSA.L) has agreed to a £7.2bn ($9.6bn) takeover bid led by Canadian insurer Intact (IFC.TO).

RSA said in a statement on Wednesday it had agreed terms of an all-cash offer with Intact Financial Corporation and Tryg (TRYG.CO), a Danish insurer also taking part in the deal.

RSA is best known for its More Than car insurance brand in the UK but has operations all over the world. The acquirers plan to carve up the business as part of the deal.

The 685p-a-share bid for the business represents a 50% premium on RSA’s share price prior to news of the takeover bid breaking earlier this month.

RSA chairman Martin Scicluna urged investors to back the “attractive” offer.

“We believe that our staff, our businesses and our customers can prosper under the stewardship of Intact and Tryg, two great businesses with long histories and strong reputations,” Scicluna said in a statement.

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If approved by shareholders, RSA would be split between Intact and Tryg. Intact will take control of the company’s UK, Canadian, and international operations, while Tryg will take over the Scandinavian business. RSA’s Danish franchise will be jointly owed by Tryg and Intact.

Tryg will pay £4.2bn for its part of the business, while Intact will pay £3bn.

“Acquiring RSA's strong businesses will expand our leadership position in Canada, build on our expertise in specialty lines, and provide a substantial opportunity to build on the UK and international operations,” Charles Brindamour, chief executive of Intact, said in a statement.

“With their skills and experience, RSA's employees will join us in helping people, businesses and society prosper in good times and be resilient in bad times.”

RSA jumped at the open in London on Wednesday when details of the bid were confirmed. Photo: Yahoo Finance UK
RSA jumped at the open in London on Wednesday when details of the bid were confirmed. Photo: Yahoo Finance UK

Morten Hübbe, group chief executive of Tryg, said in a statement: “We are pleased to be formalising our offer for RSA's Swedish and Norwegian franchise.

“These are excellent companies, with fantastic people, well-regarded brands, happy and loyal customers, and strong financial results.”

Shares in RSA rose 4% in early trade on Wednesday to trade at 673p.

Shares in Tryg were 1.8% lower in Copenhagen.

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