Zurich announces $9 billion offer for U.K. rival
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Zurich Insurance Group Ltd. on Tuesday made a tentative offer to buy London-based RSA Insurance Group P.L.C. in a deal that would value RSA at about £5.6 billion ($8.79 billion).
RSA said in a statement Tuesday that it would be willing to recommend the offer to its shareholders subject to due diligence and the resolution of certain terms.
Under the terms of the proposed offer, which could still be withdrawn, Zurich said it would offer £5.50 ($8.63) in cash per share of RSA.
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In addition, RSA shareholders would receive an interim dividend of 3.5 pence (5.5 cents) per share announced by RSA on Aug. 6.
Zurich last month said it was considering an offer for RSA.
Under the terms of the U.K. Code on Takeovers and Mergers, Zurich was required to either indicate a firm intention to make an offer for RSA, or that it did not intend to make such an offer, by 5 p.m. London time Tuesday.
RSA said Tuesday that the U.K. Panel on Takeovers and Mergers, the independent body that supervises and regulates takeovers in the United Kingdom, had granted — at RSA's request — an extension to that deadline until Sept. 22 to enable both parties to continue discussions.
In the meantime, Zurich reserves the right to make an offer for RSA of less than £5.50 per share.
London-based multiline insurer RSA has operations in the United Kingdom, Canada, Ireland, Scandinavia and Latin America.
It posted net income of £60 million ($94.1 million) for 2014, and pretax profit of £288 million ($451.9 million) for the first half of 2015.
A deal would give Zurich a strong position in the U.K. nonlife insurance market, analysts noted.
