Warren Buffett revisits RBS insurance sale
by Gill Montia
Story link: Warren Buffett revisits RBS insurance sale
Legendary investor, Warren Buffett, has been named as a potential bidder for Royal Bank of Scotland’s (RBS) insurance business.
The sale of the business was first mooted in 2008, before the departure of disgraced former RBS chief executive, Sir Fred Goodwin, who was determined to stick out for a £6 billion asking price.
The scale of taxpayer support needed to keep RBS afloat during the financial crisis has since resulted in demands for divestments from the EU Competition Commission.
The group’s Direct Line, Churchill, Green Flag and NIG units are therefore being auctioned again and are expected to fetch considerably less than originally demanded.
Mr Buffett’s Berkshire Hathaway investment vehicle did show an interest in Direct Line at the time of the original sale, along with US insurer, Allstate, but no formal bid was submitted.
RBS’s insurance division employs around 16,000 staff and in May, the group warned that 2,000 job losses could be expected in the year ahead, in preparation for a sale.