RSA announces £130m sale of operations in Singapore and Hong Kong
RSA Insurance Group plc announces that today it has reached an agreement, subject to regulatory approvals, to sell the insurance business of each of its branches in Singapore (RSA Singapore) and Hong Kong (RSA Hong Kong) to Allied World Assurance Company, Ltd (Allied World).
Assuming each transaction completes (and subject to the adjustments described below), RSA will receive aggregate consideration of approximately £130m payable in cash. The transactions are expected to result in a gain on sale of approximately £110m and an addition to the Group’s tangible net assets of approximately £95m, further improving the Group’s capital strength.
Subject to obtaining relevant regulatory approvals in the respective countries, each transaction is expected to complete during the first half of 2015.
Stephen Hester, RSA Group Chief Executive said:
“This transaction builds further on the momentum of our recently announced disposals in the Baltics, Poland, Canada (Noraxis) and China, and represents continued progress against our aim of tightening the strategic focus of the Group. Further disposals are targeted over the next 12-18 months to complete this process.”
RSA Singapore and RSA Hong Kong underwrite a balanced mix of Commercial Specialty and Retail (both Commercial and Personal) business.
RSA’s operations in Singapore had total assets of £236m1 and net assets of £30m1 at 31 December 2013. Net written premiums in 2013 were £66m1 with a pre-tax profit of £12m1. The consideration payable for RSA Singapore is approximately £93m.
RSA’s operations in Hong Kong had total assets of £185m and net assets of £0.4m at 31 December 2013. Net written premiums in 2013 were £47m with a pre-tax profit of £5m. The consideration payable for RSA Hong Kong is approximately £37m.
The consideration payable under each transaction, each of which is subject to adjustment based on the net asset value of the relevant business as at completion, is payable in full on completion of the relevant deal. Neither sale is conditional upon the other sale occurring.
As part of the transaction, senior management are expected to remain with the respective businesses at completion.
- ENDS -
|Rupert Taylor Rea||Louise Shield|
|Head of Investor Relations||Director of External Communications|
|Tel: +44 (0) 20 7111 7140||Tel: +44 (0) 20 7111 7047|
|Investor Relations Executive||
Media Relations Manager
|Tel: +44 (0) 20 7111 1891||
Tel: +44 (0) 20 7337 5164
Notes to editors:
Goldman Sachs acted as Sole Financial Advisor to RSA Group
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 Allied World
Allied World Assurance Company Holdings, AG, through its subsidiaries and brand known as Allied World, is a global provider of innovative property, casualty and specialty insurance and reinsurance solutions. Allied World offers superior client service through a global network of offices and branches. All of Allied World's rated insurance and reinsurance subsidiaries are rated A by A.M. Best Company, A by Standard & Poor's, and A2 by Moody's, and its Lloyd's Syndicate 2232 is rated A+ by Standard & Poor's and Fitch.
This press release may contain ‘forward-looking statements’ with respect to certain of the Group’s plans and its current goals and expectations relating to its future financial condition, performance results, strategic initiatives and objectives. Generally, words such as “may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “aim”, “outlook”, “believe”, “plan”, “seek”, “continue” or similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance. By their nature, all forward-looking statements are inherently predictive and speculative and involve risk and uncertainty because they relate to future events and circumstances which are beyond the Group’s control, including amongst other things, UK domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing impact and other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation or regulations in the jurisdictions in which the Group and its affiliates operate. As a result, the Group’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in the Group’s forward-looking statements. Forward-looking statements in this press release are current only as of the date on which such statements are made. The Group undertakes no obligation to update any forward-looking statements, save in respect of any requirement under applicable law or regulation. Nothing in this press release shall be construed as a profit forecast.
Issued by RSA Insurance Group plc, 20 Fenchurch Street, London EC3M 3AU
1 Excludes intra-Group business reinsured into RSA Singapore, which does not form part of the transaction.