UK insurance firm RSA agrees to GBP7.2B takeover offer

LONDON (AP) — RSA Insurance, one of the United Kingdom’s (UK) oldest insurance companies, agreed yesterday to a takeover by Canadian and Danish buyers in a cash deal that values it at GBP7.2 billion.

Canada’s Intact Financial Corp and Denmark’s Tryg said their offer of 685 pence per share represents a 51 per cent premium on RSA’s share price on November 4, the day before the announcement of a possible offer.

Under the terms of the deal, Tryg will pay GBP4.2 billion to take over RSA’s Swedish and Norwegian businesses, while Intact will pay GBP3 billion to buy RSA’s operations in Canada, the UK, Ireland and other international locations. The two companies will co-own RSA’s Danish business.

The deal needs to be approved by shareholders.

Tryg said it was likely to cut between 10 per cent and 15 per cent of staff in the combined businesses across Norway and Sweden in the first three years following the acquisition.

Intact said the deal will lead to some job cuts in RSA’s global head office functions but did not provide more detail. It said it would confirm the impact to affected staff within 120 days of the deal’s completion.

RSA employs some 13,500 people worldwide and has about nine million customers across over 100 countries.

Founded more than 305 years ago, RSA is one of the world’s longest-standing general insurers. Its brands, including More Than, offer personal insurance for home, car, pet and travel. The company also has a commercial insurance arm.

“RSA has provided peace of mind to individuals and protected businesses from risk for more than 300 years,” said RSA Chairman Martin Scicluna.

“I am confident that the values of our business, and not least our dedication to serving customers well, will be sustained as part of Intact and Tryg.”