The Board of RSA Insurance Group has confirmed that the UK insurer has received a proposal from a consortium comprised of Intact Financial Corporation and Tryg A/S regarding a possible offer for the company.
The proposal includes 685 in cash per RSA share, alongside payment by RSA of the announced interim dividend of 8 pence per share. Overall, this offer represents a roughly £7.2 billion (USD 9.5bn) transaction which would see Intact pay £3 billion (USD 3.9bn) and Tryg paying £4.2 billion (USD 5.5bn).
Under the terms of this proposal, it’s understood that Intact would retain RSA’s Canada and UK & International businesses and obligations, and Tryg would retain the firm’s Sweden and Norway operations, with the pair co-owning RSA’s Denmark business.
According to an announcement on the potential deal, the consortium views the combination of RSA’s operations with those of Intact and Tryg as “strategically compelling.” The deal would serve to bolster Intact’s position as a leading P&C insurer, taking its total direct premiums written from CAD 12 billion to CAD 20 billion.
For Tryg, the combination with both RSA’s Swedish and Norwegian operations would provide the firm with a “unique opportunity to strengthen its position and break into the top-3 for P&C in Sweden and Norway.”
A statement from RSA, notes: “The Proposal is subject to the satisfaction or waiver of pre-conditions relating to, amongst other things, due diligence, the recommendation of the Board of RSA, the support of RSA’s pension fund trustees and Board approvals from Intact, Tryg and the Tryg Foundation.
“The Board of RSA has indicated to the Consortium that it would be minded to recommend the Proposal, subject to satisfactory resolution of the other terms of the possible offer, including a period of due diligence. Accordingly, RSA is engaged in discussions with the Consortium in relation to the possible offer.
“There can be no certainty that an offer will be made. This announcement is being made with the consent of the Consortium.”
