IAG rejects QBE bid
The Australia-based insurer IAG has rejected a takeover bid of A$7.6 billion (£3.6 billion) from rival insurance group QBE.
Australia has over 100 insurance providers, and a general insurance industry worth an annual A$30 billion.
However, intense competition has squeezed prices, whilst bad weather has seen payouts increase. This has resulted in many Australian companies expanding into Asia and Europe, as well as mergers between companies in Australia.
Over the last 25 years QBE has acquired over 100 companies, and analysts predicted that they would swoop for IAG, who have seen sliding profits and consequent tumbles in their share price.
The rumours became reality this week when QBE broke cover and made an outright offer of $A7.09 billion last Thursday. This offer was rejected by IAG, and QBE returned with an offer of A$7.6 billion, which has also been rejected.
Fuelled by the offers, share prices in the last week rose to give IAG a value of A$8.2 billion.
It is not yet known whether QBE will make a further offer.
Category: Companies News, Insurance News
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