More Than owner RSA Insurance has agreed a £7.2 billion takeover by Canadian and Danish rivals that will break up the firm whose history dates back more than 300 years.
A consortium of Canada’s Intact Financial Corporation and Danish insurer Tryg will pay 685p a share, as well as an 8p a share dividend payout, for FTSE 100-listed RSA.
Under the terms of the deal, Intact will keep RSA’s UK, Canadian and international operations, while Tryg will take on the Swedish and Norwegian businesses, and they will both co-own the Danish arm.
RSA’s Scandinavian business will be spun-off.
RSA said the deal – which has to be approved by shareholders – will lead to some “very modest” job cuts among its global head office team in London, which is less than 150 people.
But as Intact does not yet have a UK presence, there is little overlap on these shores.
RSA boss Stephen Hester said he believed the deal would end up being a “positive” for the workforce “rather than the normal threat that one can see in takeover situations”.
There will be a greater impact on jobs across Intact’s merged business in Canada, though it said overall this would affect around 2% of its enlarged workforce.
Tryg revealed it was likely to cut between 10% and 15% of staff in the combined businesses across Norway and Sweden in the first three years following the acquisition.
RSA employs around 5,300 UK staff out of just under 13,000 worldwide and has about nine million customers across more than 100 countries.
Mr Hester hailed an “exceptionally high” takeover price for the group, with the deal unanimously backed by the group’s board, and agreed by its pensions trustees.
The price marks a 51% hike on RSA’s closing share price on November 4 – the day before plans for the offer were first revealed – which Mr Hester claimed was the highest premium paid for a European insurer in at least a decade.
Tryg will pay £4.2 billion of the purchase price and Intact will pay £3 billion.
With its origins stretching back to 1706, RSA is one of the world’s longest-standing general insurers.
Its brands offer personal insurance for home, car, pet and travel, while it also has a commercial insurance arm.
Mr Hester said: “I will leave the company on completion (of the deal) but the company will live on and I’m confident it will prosper.”
For Intact, which already has more than 16,000 staff, the deal will mark its debut into the UK market and a “significant step to accelerate its strategy and leadership”.
The takeover will almost double Intact’s annual written premiums to around 20 billion Canadian dollars (£11.5 billion).
Charles Brindamour, chief executive of Intact, said: “Acquiring RSA’s strong businesses will expand our leadership position in Canada, build on our expertise in specialty lines and provide a substantial opportunity to build on the UK and international operations.”
RSA was spun off from the then Royal Bank of Scotland, recently renamed NatWest Group, in 2012.
It was subject to an ill-fated takeover attempt by rival Zurich for £5.6 billion in 2015 but the buyer later pulled out amid woes in its own operations.