RSA announces sale of its majority-owned Canadian insurance brokerage
for an aggregate price of CAD $500m
RSA Insurance Group plc announces that today it reached agreement to sell its shareholding in Noraxis Capital Corporation, its Canadian insurance brokerage business, to a subsidiary of Arthur J. Gallagher & Co.
The total aggregate price for the business is CAD $500m. After minorities, and including estimated excess working capital, RSA is expected to receive cash consideration of CAD $441m (£238m) subject to closing adjustments on completion. The transaction is expected to close within two months and is subject to certain regulatory approvals. The transaction is expected to result in a gain on sale of approximately £140m and is expected to add approximately £225m to the Group’s tangible net assets, improving the Group’s capital strength.
Stephen Hester, RSA Group Chief Executive said:
“This disposal represents further progress against our aim of tightening the strategic focus of the Group, and brings to around £540m the announced sales since our new strategy and action plan was unveiled in February. Noraxis is a sizeable brokerage business and unique in that context within the Group. RSA’s core strength is in providing, as principal, the best Personal and Commercial insurance products to our customers, and that is where our focus will continue to be as we deliver on our new strategy and action plan.
“We are proud of the work that has been done to successfully build Noraxis, however, now is the right time for RSA to realise its investment. We will continue to evaluate further non-core disposals, some of which we expect to agree during 2014.”
Noraxis is one of Canada’s largest P&C insurance brokers, operating through six majority-owned units located throughout Canada. Noraxis was founded by RSA Canada in 1999 and provides Commercial, Personal and Employee Benefits services on a retail basis.
In RSA Group’s 2013 financial statements, Noraxis accounted for £184m of total assets and £85m of shareholders’ funds at 31 December 2013, and £23m of profit in the underwriting result (presented as a contra expense in the underwriting result of Canada), and £6m of profit after amortisation, tax and minority interests for the year ended 31 December 2013.
Senior management of Noraxis and its subsidiaries are expected to remain with Noraxis at completion.
- ENDS –
|Rupert Taylor Rea||Louise Shield|
|Tel: +44 (0) 20 7111 7140||Tel: +44 (0) 20 7111 7047|
|Louise Jordan||Jon Sellors|
|Tel: +44 (0) 20 7111 1891||Tel: +44 (0) 20 7111 7327|
Notes to editors:
|GBP 1 : CAD $ 1.85|
Advisors to RSA
BofA Merrill Lynch acted as sole financial advisor to RSA. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Stikeman Elliott LLP acted as legal advisors to RSA.
With a 300 year heritage, RSA is one of the world’s leading multinational quoted insurance groups. RSA has major operations in the UK, Scandinavia, Canada, Ireland, Asia and the Middle East, Latin America and Central and Eastern Europe and has the capability to write business in around 140 countries. Focusing on general insurance, RSA has around 23,000 employees and, in 2013, its net written premiums were £8.7 billion.
About Arthur J. Gallagher
Arthur J. Gallagher & Co. is an international service provider and plans, designs, and administers a full array of customised, cost-effective property/casualty insurance and risk management programs. Gallagher has operations in 25 countries and, through a network of correspondent brokers and consultants, offers client-service capabilities in more than 140 countries around the world.
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