Canada’s Intact Financial Corp. and Danish insurer Tryg A/S agreed to buyRSA Insurance Group Plc for about 7.2 billion pounds ($9.6 billion) in what is the biggest acquisition of a U.K.-listed company this year.
The price of 685 pence per share in cash represents a premium of about 51% to the closing price on Nov. 4, the last business day before Bloomberg Newsreported the takeover talks. Tryg will pay about 4.2 billion pounds and Intact will pay about 3 billion pounds, according to a statement on Wednesday.
“The board of RSA is pleased to be recommending Intact and Tryg’s cash offer for the company, which delivers attractive, certain value for our shareholders,” RSA Chairman Martin Scicluna said in the statement. “The offer reflects the strength and performance of RSA during a challenging period for our industry, representing a significant premium in cash.”
RSA is set to be broken up under the plan, with Intact keeping its Canadian and U.K. and international operations. Tryg would take the Swedish and Norwegian operations, which will help make it Scandinavia’s biggest listed property and casualty insurer. RSA’s Danish business would be jointly owned by the two firms.
Insurers have been seeking to gain scale as they grapple with the impact of low interest rates and the coronavirus pandemic. The purchase of RSA would be the biggest takeover of an insurer announced this year, surpassing KKR & Co.’s acquisition of the former life insurance arm of Goldman Sachs Group Inc. for more than $4 billion.
RSA, which traces its roots back to 1706, offers a range of general and specialty insurance products and has long been viewed as a possible takeover target. In 2015, Zurich Insurance Group AG abandoned a 5.6 billion-pound offer for RSA after an explosion at a Chinese port triggered losses in its own business.
Under the terms of the agreement, RSA shareholders will still receive a planned divided of 8 pence per share that will be paid in December.
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