The acquisition is planned to be executed via a court-sanctioned scheme of arrangement
Intact Financial and Tryg have reached an agreement to acquire UK-based RSA Insurance Group for 685p per share or about £7.2bn in cash.
Under the terms of the deal, Canada-based insurance company Intact Financial will bear £3bn of the consideration, while Denmark-based non-life insurance company Tryg will pay £4.2bn.
The acquisition is planned to be executed through a court-sanctioned scheme of arrangement.
Earlier this month, RSA Insurance received a takeover offer from Intact and Tryg.
Intact Financial, with the support of Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), will own RSA’s Canadian, UK and International (UK&I) entities.
Tryg will take over RSA’s businesses in Sweden and Norway.
Besides, Intact Financial and Tryg will jointly own the Danish business of RSA on a 50:50 basis.
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 our shareholders.
“The offer reflects the strength and performance of RSA during a challenging period for our industry, representing a significant premium in cash.
“We believe that our staff, our businesses and our customers can prosper under the stewardship of Intact and Tryg, two great businesses with long histories and strong reputations.”
The deal will strengthen Intact Financial’s speciality lines platform while adding global expertise. It also enables the Canadian firm’s entry into the UK and Ireland at scale.
Intact Financial CEO Charles Brindamour said: “This acquisition is highly strategic for Intact. It expands our leadership position in Canada, builds on our strong track record in speciality lines, and puts us in a solid position to strengthen RSA’s UK and Ireland operations.
“We have strong capabilities in data, risk-selection and claims management, which we plan to leverage across the business.”
For Tryg, the deal is expected to help it establish the largest non-life insurer in Scandinavia, besides creating a top-three insurer in Sweden and Norway.
It will also diversify the business of the Danish insurer and help it gain benefits across a balanced portfolio.
The transaction, which is anticipated to be closed during Q2 2021, will be subject to RSA shareholders’ approval, regulatory approvals, and other conditions.