Intact Financial Corporation and its subsidiary RSA have disclosed that all conditions related to its acquisition of Direct Line Insurance Group’s brokered Commercial Lines operations have been fulfilled.
According to Intact, the transaction is anticipated to close on October 26, upon payment of a £520 million cash consideration, as reported on September 7.
Intact said it will fund the purchase price and expected integration costs using the proceeds from its recently completed $575 million common share offering and $400 million medium-term note issuance.
The deal also includes the potential for up to a further £30 million contingent payment under earnout provisions relating to the financial performance of the acquired business lines.
As per Intact, upon closing, substantially all of the future economics of Direct Line’s brokered Commercial Lines portfolio will have been transferred to RSA effective October 1, 2023, through a quota share reinsurance agreement.
At the time of the initial announcement, Charles Brindamour, Chief Executive Officer, Intact Financial Corporation, commented, “This acquisition significantly strengthens our UK&I business, and is strongly aligned with our strategic and financial objectives.
“The transaction enhances our position in the UK by doubling down on lines of business where we already outperform.”
Ken Norgrove, Chief Executive Officer, RSA, added, “We look forward to welcoming a team of experienced, highly talented and skilled colleagues from strong brands, including NIG and FarmWeb, to further enhance RSA’s strong Commercial Lines business.”
