Thu, 19 Nov 2020 | BUSINESS SALE
UK insurance group RSA, which has origins dating back over 300 years, is to be broken up after accepting a £7.2 billion bid from a consortium of Canadian insurance group Intact and Danish firm Tryg. RSA has around 9 million customers across over 100 countries and around 13,500 employees worldwide.
The consortium’s offer is for 685p per share of the company, RSA, said, along with payment of a previously announced dividend of 8p per share. The offer represents a 53 per cent premium on RSA’s average share price in the three months to the start of November.
The deal is still subject to approval from RSA shareholders, as well as competition clearance from authorities in Norway, Sweden, Canada and Denmark. However, it is expected to complete in Q2 of next year after RSA’s largest shareholder Cevian Capital, which controls 14.9 per cent of the group, committed to voting for the deal.
The deal will see Tryg pay £4.2 billion and assume control of RSA’s operations in Sweden and Norway, while Intact will pay £3 billion, taking over RSA’s UK and Ireland, Canadian and international operations.
The Danish side of RSA will be co-owned by the two firms but will be managed by Intact as strategic options, such as a sale or stock market floatation, for the business are considered.
Intact will also pay £75 million into RSA’s pension schemes, along with ongoing payments of £75 million in order to plug the funding deficit in the scheme.
RSA Chairman Martin Scicluna said: “The board of RSA is pleased to be recommending Intact and Tryg’s cash offer for the company, which delivers attractive, certain value for shareholders.”
“RSA has provided peace of mind to individuals and protected businesses from risk for more than 300 years. However, 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.”
RSA Chief Executive Stephen Hester is set to leave upon completion of the deal and could receive up to £15 million from the transaction should his share bonus schemes all be awarded. Hester joined RSA in 2014 after the firm encountered problems in its Irish business.
Since then, he has strengthened the company balance sheet through the sale of some international businesses along with a £773 million rights issue.
Post-deal, Hester said he expects job losses at RSA’s UK corporate headquarters, but added that these would likely be offset by future growth.
Intact expects to cut around 2 per cent of positions, around 520 jobs, across the whole business. However, it also hopes that over 300 jobs can be created through bringing the claim management division in-house.
Tryg Chief Executive Morten Hübbe said it was likely that up to 400 jobs would be cut in Norway and Sweden over the three years post-acquisition, with a further 80 roles in Denmark set to go.
The consortium expect to generate around £250 million in synergies from the deal, as a result of improved revenue and lower costs.
Find businesses for sale here.
If you are looking for an exit, we can help!
Market data analysis service which enables client organisations to benchmark their compensation and benefit packages. Provides salary and benefit surveys across multiple sectors, which assist clients in formulating their remuneration strategies and r...
LEASEHOLD
Thriving SME Contracting and Consultancy Business. The business was established in 2015 by our client. The business is only now being offered to the market due to our clients` desire for the business to take its next step forward.
LEASEHOLD
This highly established SRA Partnership firm located in Wales is seeking a sale or merger due to the retirement of its Senior Partner. The firm operates from two offices and has a turnover of around £500k.
LEASEHOLD
09
|
Jun
|
Long-standing retail display firm acquired out of administration | BUSINESS SALE
Manchester-based retail display specialist Axiom Marketing S...
09
|
Jun
|
Logistics group completes 23rd acquisition since 2015 | BUSINESS SALE
Logistics firm EFS Global has continued its acquisitive grow...
08
|
Jun
|
UK IT specialist acquired by New York workforce management group | BUSINESS SALE
Gibbs Hybrid, a UK-based IT and business services firm, has ...
13
|
Oct
|
Recycling group acquired out of administration | BUSINESS SALE
The Doncaster-based Universal Recycling group of companies h...
16
|
Sep
|
Plymouth window manufacturer rescued in buy-out | BUSINESS SALE
A Plymouth window manufacturing business that formed part of...
14
|
Aug
|
Distributor Cinram placed in administration after losing Universal contract | ADMINISTRATION
Distribution and logistics firm Cinram has gone into adminis...
Business Sale Report is your complete solution to finding great acquisition opportunities.
Join today to receive:
All this and much more, including the latest M&A news and exclusive resources
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.