British insurance giant RSA has recommended its shareholders back a £7.2bn takeover bid by groups from Canada and Denmark, in what could be one of the biggest M&A deals this year.
The final bid from Canada’s Intact Financial and Denmark’s Tryg comes after two weeks of speculation, and was confirmed by RSA today.
RSA has roots in companies stretching back 300 years. The global business was formed in 1996 from the merger of two older companies, and specialises in home, motor and commercial insurance.
Under the terms of the deal, Tryg would take over the Swedish and Norwegian arms of RSA. Intact would have the Canadian, British and international businesses.
Tryg would stump up £4.2bn and Intact would make up the other £3bn. The offer of 685p per share is roughly a 50 per cent premium on the early November share price, when news of a potential bid was confirmed by RSA.
RSA’s biggest shareholder Cevian Capital said it backed the deal. “We assess that the long-term competitiveness of RSA’s business will benefit from combining with Tryg and Intact,” said Cevian managing partner Christer Gardell.
Tryg chief executive Morten Hubbe said the breakup of the company would lead to advantages.
“Our deep knowledge of these markets makes us ideally placed to integrate, operate and enhance the value of our combined group over the long term.”