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Daily Insurance Industry News
Monday 19th of February 2018
August 16, 2010

Aviva confirms rejection of £5bn RSA bid

by Gill Montia

Story link: Aviva confirms rejection of £5bn RSA bid

Aviva confirms rejection of £5bn RSA bid Aviva confirms rejection of £5bn RSA bid

Aviva has confirmed that in late July, the company received a conditional proposal from RSA to acquire its general insurance (GI) businesses in the UK, Ireland and Canada (excluding RAC and Health), for £5 billion, to be funded entirely from a rights issue by RSA.

Having recently completed a strategic review, the insurer concluded that operating both Life and Non-Life businesses delivered significant benefits.

The group’s board has therefore decided that the highest value to shareholders will be delivered by resisting a break-up.

According to Aviva, the combination of Life and Non-life businesses allows it to operate with substantially less capital than if the units were stand-alone, a situation which is likely to be further reinforced under the Solvency II proposals.

Commenting on the RSA bid, Aviva chairman, Lord Sharman, says: “Given the compelling strategic and financial benefits to Aviva shareholders of retaining the GI business, its upside potential and the terms offered by RSA, the Board was unanimous in rejecting this proposal.”

Group chief executive, Andrew Moss, adds: “The progress we’re making in reshaping and transforming Aviva was evident in the 21% increase to £1.27 billion of operating profits at our interim results and we firmly believe this strategy will continue to deliver superior value for our shareholders.”

 

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