CVC joins forces with Swiss Re in RBS insurance bid

by Gill Montia

Story link: CVC joins forces with Swiss Re in RBS insurance bid

CVC Capital Partners, the Luxembourg-based private equity firm, is reported to have joined forces with Swiss re, the world’s largest reinsurer, to make a bid for the insurance business of Royal Bank of Scotland (RBS).

The unit, which includes the Direct Line, Churchill, Privilege, UKI and NIG brands, was put up for sale during the summer, with a price tag of around £7 billion.

According to a report in The Times, the bidders are interested in a 51% stake in the business and are prepared to pay in excess of £3 billion.

The sale could be the first of a number of disposals made by the RBS group, which will be headed by Stephen Hester, currently chief executive of British Land, from 21st November.

Mr Hester is replacing Sir Fred Goodwin, who has spent nine-years at the helm of the Edinburgh-based bank; he is commissioned with restructuring the group, refocusing it into a smaller business with a less risky investment strategy.

It is understood that the CVC bid is being led by Fred Watt, a former chief financial officer of RBS, who stepped down in June 2005, explaining that he wished to spend more time with his family.