RSA buyers seal £7.2 billion takeover deal

Canadian and Scandinavian insurers have made successful bids for a British insurance group. Intelligent insurer reports.

UK-based Royal & Sun Alliance Insurance Group (RSA) has agreed a £7.2 billion ($9.7 billion) takeover offer from Canadian non-life insurer Intact Financial Corporation and Scandinavian insurer Tryg.

Under the deal, Intact will acquire RSA’s Canadian, UK and International operations for £3 billion and Tryg will buy its Swedish and Norwegian businesses for £4.2 billion. As a result, RSA shareholders will receive an interim dividend of 8 pence per share.

Intact and Tryg will co-own RSA’s Danish business on a 50:50 economic basis.

The boards of directors of all three companies involved approved the deal unanimously. The acquisitions are expected to complete during the second quarter of 2021.

Intact said the acquisition will expand its leadership position in Canada, with annual premiums written expected to increase by around 30 percent from $10 billion to $13 billion.

“This acquisition is highly strategic for 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,” said Intact CEO Charles Brindamour.

“We’re part of the Commonwealth, they should not be afraid of us.”

Charles Brindamour, Intact

Brindamour and some of his Canadian colleagues are planning to relocate to the UK to manage the acquisition of RSA. He told The Times newspaper that the speedy integration of RSA’s British business would be critical to the deal’s success and that the deal would not mean a major reorganisation. The CEO said he and his team intended to learn more about the British market as Intact currently has no presence there.

“We’re part of the Commonwealth, they should not be afraid of us,” Brindamour told the newspaper. “We’re builders. We’re in this to grow the business and expand the leadership.

“There is a good team, good businesses and good brands. We want to bring in incremental progress to what they are doing.

“Our inclination is, if a brand is well recognised, to invest. There is no point bringing an unknown brand to the market if you have good brands already,” he added.

Following news of the deal, Fitch Ratings affirmed RSA’s insurer financial strength rating at ‘A+’ and RSA Insurance Group’s long-term issuer default rating at ‘A’ with a stable outlook.

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Image: Shutterstock / NESPIX

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