RSA to sell Canadian unit to Arthur J. Gallagher

The RSA Insurance Group of Britain has agreed to sell its Canadian insurance brokerage business to a subsidiary of Arthur J. Gallagher & Company for about USD460 million.

The deal to sell Noraxis, one of the largest property and casualty insurance brokers in Canada, brings RSA’s total assets sales since February to about USD909 million. The company said it expected to receive a cash consideration of CAD441 million, subject to adjustments before closing.

The transaction is the latest move by Stephen Hester, RSA’s chief executive, to reshape the insurer and improve its balance sheet after problems in its Irish business last year.

“This disposal represents further progress against our aim of tightening the strategic focus of the group,” Hester said in a statement.

After the transaction, Arthur J. Gallagher will hold an equity stake of 87 percent in Noraxis, with the remaining 13 percent owned by various members of the broker’s management. The transaction is subject to regulatory approval and is expected to close in July 2014.