Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. United Kingdom
  4. London Stock Exchange
  5. RSA Insurance Group
  6. News
  7. Summary
    RSA   GB00BKKMKR23

RSA INSURANCE GROUP

(RSA)
  Report
SummaryQuotesChartsNewsRatingsCompanyFinancials 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Zurich Insurance proposes 5.6 billion pound takeover of rival RSA

08/25/2015 | 06:57am EDT
File photo of a sign of the RSA insurance company outside its office in London

LONDON/ZURICH (Reuters) - Zurich Insurance (>> Zurich Insurance Group Ltd) made a friendly 5.6 billion pound takeover proposal for British rival RSA (>> RSA Insurance Group plc) on Tuesday, paving the way for one of Europe's biggest insurance deals.

LONDON/ZURICH (Reuters) - Zurich Insurance (>> Zurich Insurance Group Ltd) made a friendly 5.6 billion pound takeover proposal for British rival RSA (>> RSA Insurance Group plc) on Tuesday, paving the way for one of Europe's biggest insurance deals.

Zurich said a month ago it was weighing a bid but left it to the last day under British takeover rules to unveil a cash offer of 550 pence per share, roughly in the middle of the price range expected by investors in Zurich and RSA.

RSA said it planned to recommend the proposal to its board and gave Zurich another four weeks to come up with a firm takeover offer, though the Swiss insurance company reserved the right to ultimately bid below 550 pence per share.

Tighter European capital regulations due to come into force in January 2016, strong competition in the insurance sector and low investment returns have encouraged several insurance mergers and more are expected in Europe and the United States.

The deal is similar in size to Aviva's (>> Aviva plc) agreed takeover this year of rival UK insurer Friends Life and would beat Exor's (>> EXOR SpA) $7 billion purchase of Partner Re (>> Partnerre Ltd).

Analysts say a merger could offer operating efficiencies for Zurich, which like RSA has a large presence in Britain, and also provide the Swiss insurer with better access to Canada, Scandinavia and Latin America, where RSA has a strong presence.

Zurich, which has said it would not overpay and is seeking a return on any investment in RSA of at least 10 percent, said it had reached a "common understanding" with RSA on how the British general and commercial insurer values itself.

RSA, known for its "More Than" home and car insurance brand in Britain, is in the early stages of a turnaround under former RBS boss Stephen Hester.

CAUTION

Shares in RSA rose 4.5 percent to 517.5 pence by 1030 GMT, still well below the offer proposal. Traders said this was because there was no firm bid and there was an outside chance an offer could be lower than 550 pence, given issues such as the management of its more than 7 billion pound pension scheme.

Adding to market caution was uncertainty over whether stocks would fall further on the back of weakness in Chinese markets that has driven the FTSE 100 <.FTSE> down 15 percent in August.

One top 10 shareholder in Zurich was unhappy with the offer price given the weak macroeconomic backdrop, saying it would be hard for the Swiss company to hit its desired return targets.

"After a large market sell-off, it's a big price. More than the market expected. It seems Zurich management is rather ignorant in regards of market forces," said the shareholder, who declined to be named.

Analysts at Berenberg said the offer premium of 26 percent to RSA's share price before Zurich first signalled its interest on July 28 meant the choice was easy for RSA shareholders, whose largest is activist investor Cevian Capital with 13 percent.

Zurich, though, would need to save $500 million to reach its target of a 10 percent return on investment, the analysts added, and could end up having to sell RSA's profitable Scandinavian business to make the numbers stack up.

Shore Capital's Eamonn Flanagan said a deal of some kind was "now seeming inevitable", though he did not rule out the possibility of a counterbid from another European insurer.

(Additional reporting by Freya Berry and Simon Jessop in London; editing by David Clarke)

By Carolyn Cohn and Paul Arnold


ę Reuters 2015
Stocks mentioned in the article
ChangeLast1st jan.
AVIVA PLC 0.73% 390.5 Delayed Quote.19.22%
CLARKE INC. 0.36% 8.48 Delayed Quote.26.95%
FTSE 100 0.64% 7060.97 Delayed Quote.8.29%
MSCI UNITED KINGDOM (STRD) 0.10% 1140.044 Real-time Quote.10.42%
RSA INSURANCE GROUP 0.00% 684.2 Delayed Quote.1.00%
S&P UNITED KINGDOM (PDS) 0.68% 1406.52 Delayed Quote.8.89%
SWISS RE LTD 0.69% 84.64 Delayed Quote.0.84%
ZURICH INSURANCE GROUP LTD 0.03% 367.6 Delayed Quote.-1.63%
All news about RSA INSURANCE GROUP
07/28INTACT FINANCIAL : Fitch Rates Intact's Acquired RSA Subsidiaries; Intact Falls ..
MT
07/23INTACT FINANCIAL : Moody's Assigns Rating to Recently Purchased Canadian Insuran..
MT
07/09Sainsbury's rebuked on pay as one fifth of investors oppose report
RE
06/14Intact Financial Corporation Announces Sale of Codan DK to Alm. Brand A/S Gro..
AQ
06/11Intact Financial Announces Sale of Codan DK to Denmark's Alm. Brand A/S Group..
MT
06/03RSA INSURANCE : You don't have to be a rocket scientist…
PU
06/02Takeover of RSA
AQ
06/02RSA Insurance Delists from London Bourse as Takeover Completes
MT
06/02RSA INSURANCE GROUP PLC : Mixed general shareholder meeting
CO
06/01Intact Financial, Danish Insurer Tryg Complete Acquisition of UK-Based RSA In..
MT
More news
Financials
Sales 2021
Net income 2021
Net Debt 2021
P/E ratio 2021
Yield 2021
Capitalization 7 160 M 10 173 M -
EV / Sales 2021
Capi. / Sales 2022 1,11x
Nbr of Employees 11 840
Free-Float -
Chart RSA INSURANCE GROUP
Duration : Period :
RSA Insurance Group Technical Analysis Chart | RSA | GB00BKKMKR23 | MarketScreener
Income Statement Evolution
Managers and Directors
Scott Egan Chief Executive Officer & Executive Director
Mark Steven Hodges Chairman
Charlotte Jones Independent Non-Executive Director
Clare Jane Bousfield Independent Non-Executive Director
Sally Bridgeland Independent Non-Executive Director