Intact teams with Tryg to buy British insurer RSA for $9.6B
British insurance group RSA is backing a 7.2-billion pound (US$9.55 billion) cash offer from Canada's Intact Financial and Denmark's Tryg in one of Europe's biggest financial takeover bids 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 CEO Stephen Hester told reporters he planned to step down after the deal's completion, adding that he expects a small number of job losses at the group's U.K. headquarters and in Canada and Scandinavia as those businesses are integrated.
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 773-million pound 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 breakup of the British group. Toronto-based Intact would gain RSA'S Canada, U.K. and international operations while Tryg would take the Sweden and Norway businesses. The pair would co-own RSA'S Danish unit.
Tryg would pay 4.2 billion pounds while Intact would contribute three billion pounds.