UK insurer RSA in £7.2B takeover talks with foreign suitors

Insurers Intact Financial and Tryg are in talks to acquire RSA in a £7.2 billion (about $9.5 billion) deal that would break up the 300-year-old insurance company, known for the More Than consumer insurance brand.  

If the deal happens, it will be the largest takeover of a UK-listed company this year.

Although activity has declined from the highs of 2018 and 2019, M&A in the insurance industry specifically has remained significant this year in the UK, with 68 deals totaling £8.7 billion through Nov. 6, according to PitchBook data.

In one of the larger transactions, Allianz bought Legal & General and Liverpool Victoria's general insurance businesses for a combined £820 million in June. A month later, Sampo and Rand Merchant Investment agreed to buy motor insurer Hastings for £1.7 billion.

Under the 685 pence per share offer, Denmark's Tryg will pay £4.2 billion to keep RSA's Swedish and Norwegian operations. Meanwhile, Toronto-based Intact would spend £3 billion to take the Canadian and UK businesses. The pair would co-own RSA's Danish activities.

RSA said its board is likely to recommend the offer, which represents a 49% premium on its Nov. 4 closing price. The group has received takeover interest from foreign peers before, coming close to a £5.6 billion deal in 2015 with Switzerland's Zurich Insurance. Reports emerged in 2018 that Germany's Allianz was examining a bid for the company. 

The group traces its origins back to 1706 when it was set up as Sun Insurance. RSA now has around 13,500 employees and 9 million customers in more than 100 countries.