Bankinter acquires RBS’s stake in Spanish Direct Line business
Royal Bank of Scotland (RBS) has announced the sale of its 50% share in Spanish Direct Line business, Linea Directa Aseguradora.
The disposal is being made to Bankinter, the Spanish bank that owns the other half of the business, for €426 million (£375 million).
RBS first revealed plans to sell its stake in the 50/50 joint venture in May of last year, when the group announced the auction of its entire insurance operations. At the time Bankinter made an approach.
However, the terms under which the joint venture was set up in 1994 include a clause that allows either partner to acquire the other’s share in the business, should a third party take control of either bank.
Bankinter has now informed RBS of its intention to exercise this right as earlier this month, RBS failed to sell more than 0.7% of £5 billion worth of shares, leaving the UK Government to take up the balance and the bank headed for 70% state-ownership.
Linea Directa Aseguradora has around 1.6 million policyholders and posted pre-tax profit of €100 million in 2008.
Category: Insurance News, Royal Bank of Scotland News
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