Tryg, Intact offer to buy RSA for USD9.3 billion

RSA recently announced that it had received an approach from Intact and Tryg A/S (together the “Consortium”) regarding a possible cash offer by the Consortium for RSA at a price of 685 pence per RSA share. Under the Proposal RSA shareholders will receive in addition the announced interim dividend of 8 pence per RSA share. This would represent an approximately GBP7.2 billion transaction with Intact paying GBP3.0 billion and Tryg paying GBP4.2 billion. Intact would retain RSA’s Canada and UK & International operations and obligations, Tryg would retain RSA’s Sweden and Norway operations, and Intact and Tryg would co-own RSA’s Denmark operations.

The Proposal is subject to the satisfaction or waiver of pre-conditions relating to, amongst other things, due diligence, the recommendation of the Board of RSA, the support of RSA’s pension fund trustees and Board approvals from Intact, Tryg and TryghedsGruppen. The Board of RSA has indicated to the Consortium that it would be minded to recommend the Proposal, subject to satisfactory resolution of the other terms of the Proposal, including a period of due diligence which is currently underway by the Consortium.

Intact provided further information regarding its proposed participation in the Consortium and its plans for the RSA businesses in its Canada and Specialty lines segments, as well as the opportunities in the UK & International businesses and from co-ownership in a top 3 franchise in Denmark. Intact will benefit by entering the UK & Ireland markets at scale through RSA’s top five position with strong brands in the UK, which at CAD80 billion is Europe’s largest P&C sector, and its top 10 position in Ireland. Intact will also benefit from entry into several European and Middle Eastern markets.