Intact, Tryg agree to buy insurer RSA

$9.6-B deal one of Europe’s biggest financial takeovers in 2020

LONDON — Canada’s Intact Financial and Denmark’s Tryg on Wednesday said they had reached an agreement to buy British insurance group RSA for US$9.6 billion in cash in one of Europe’s biggest financial takeovers this year.

Insurers have become an attractive proposition since the coronavirus crisis, despite reputational damage from disputes over business interruption claims, industry sources say. Home-working has led to fewer claims on home and motor insurance while commercial insurance rates have risen sharply.

RSA’s directors backed the Intact-Tryg bid unanimously and recommended shareholders vote in favour of the consortium’s offer, the company said on Wednesday, having first flagged the approach early this month.

Best known in Britain for its More Than brand, RSA provides home, motor and commercial insurance and also has large operations in Canada, Ireland and Scandinavia.

RSA chief executive Stephen Hester told reporters he planned to step down after the deal’s completion.

The deal “represents an excellent outcome for all of our constituencies”, Hester said.

The former NatWest boss, who has shored up RSA’s balance sheet with a US $968million rights issue and scaled back underperforming operations since joining in 2014, said he expects the deal to complete in the second quarter of 2021, but has no plans for the future as yet.

The proposed takeover would result in the break-up of the British group. Intact would gain RSA’s Canada, U.K. and international operations while Tryg would take the Sweden and Norway businesses. The pair would coown RSA’s Danish unit.

Intact CEO Charles Brindamour told reporters his company would invest in RSA’s U.K. operations and that job losses in the U.K. and Canada would be capped at two per cent.

His Tryg counterpart Morten Hubbe also told reporters job losses in Scandinavia would be relatively low, describing RSA’s businesses there as “high quality.”