It's official – massive RSA takeover deal secured

Takeover will be the biggest acquisition of a UK-listed company in 2020

It's official – massive RSA takeover deal secured

Insurance News

By Alicja Grzadkowska

After weeks of speculation and financial manoeuvring, a huge insurance deal has finally been confirmed, with Bloomberg now reporting that Canadian insurer Intact Financial Corp. and Danish insurer Tryg A/S have agreed to purchase RSA Insurance Group Plc for £7.2 billion. This takeover tops the M&A charts as the biggest acquisition of a UK-listed company in 2020.

Tryg’s bill for its part of the deal will reportedly come out to £4.2 billion, while Intact will be on the hook for £3 billion. RSA will be broken up under the plan – Intact will hold on to the Canadian, UK, and international operations, while Tryg will grab the Swedish and Norwegian operations, in turn, making it Scandinavia’s biggest listed property and casualty insurer. Finally, RSA’s Danish business would be jointly owned by the two acquiring companies.

“The board of RSA is pleased to be recommending Intact and Tryg’s cash offer for the company, which delivers attractive, certain value for our shareholders,” said Martin Scicluna, RSA chairman, in the statement. “The offer reflects the strength and performance of RSA during a challenging period for our industry, representing a significant premium in cash.”

The deal is in line with the trend of insurers looking for scale as they feel the impact of low interest rates and the effects of the coronavirus pandemic. It also overtakes KKR & Co.’s acquisition of the former life insurance arm of Goldman Sachs Group Inc. for more than US$4 billion.

The 314-year-old RSA has been a takeover target for some time now. Back in 2015, Zurich Insurance Group AG was on the cusp of making a £5.6 billion offer for the general and specialty insurance firm, but abandoned the deal after an explosion at a Chinese port led to losses in its own business.

Last week, Intact struck a deal with Caisse de dépôt et placement du Québec, the Canada Pension Plan Investment Board, and the Ontario Teachers’ Pension Plan to provide CA$3.2 billion in financing to back a takeover of RSA.

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