RSA Insurance mulls $9.5 billion takeover from foreign insurers

The potential acquisition could become one of the largest insurance M&A transactions of 2020.

RSA is a multinational general insurance company headquartered in London. (Photo: RSA)

London-based RSA Insurance Group is reportedly considering a 7.2 billion-pound ($9.5 billion) takeover deal that is on track to be the largest M&A transaction of a U.K. company this year — and one of the biggest deals involving a P&C insurance carrier globally.

In a recent Bloomberg article, Opinion Columnist Chris Hughes writes that “A takeover offer that would have been so-so in February becomes impossible to refuse for [RSA] whose shares have been hit by the pandemic.”

Canadian insurer Intact Financial Corp. and Danish insurer Tryg A/S offered 685 pence per RSA share that represents a 49% premium to RSA’s last close before the announcement, Bloomberg reported.

The proposal stipulates that Intact would retain RSA’s Canada and U.K. & international operations; Tryg would take RSA’s Sweden and Norway operations, and Intact and Tryg would co-own RSA’s Denmark business.

In a statement, RSA said that it “would be minded to recommend the Proposal, subject to satisfactory resolution of the other terms of the possible offer, including a period of due diligence.”

Deals, deals, deals

RSA’s possible takeover by Intact and Tryg is just one more transaction in a very active year for insurance M&A deals.

Bloomberg’s data indicates that acquisitions involving insurance companies are up nearly 50% in 2020, totaling $130 billion.

In first-half 2020, the world’s largest completed insurance M&A deal was French bank La Banque Postale’s takeover of insurer CNP Assurances for $6.3 billion, according to Clyde & Co. At $9.5 billion, the RSA transaction is on pace to be one of — if not the — largest deals of the year if closed by year’s end.

In the U.S., the most significant P&C insurer deal so far in 2020 has been National General Holdings Corp.’s agreement to sell to Allstate Corp. for $3.73 billion, says an analysis by S&P Global Market Intelligence. On the brokerage side, Aon Plc agreed to buy Willis Towers Watson Plc in an almost $30 billion transaction in March 2020, which is expected to complete in Q1 2021.

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