Executives with Canada’s largest property and casualty insurer have had their eye on RSA for a long time, the CEO of Intact Financial Corp. said recently.
Intact Financial Corp. announced Wednesday that a deal to acquire RSA PLC has been approved by the boards of Intact, RSA, and Denmark-based Tryg A/S.
“We have been thinking about finding a way to make this transaction possible for many years,” Intact CEO Charles Brindamour said Wednesday during a press conference.
He was asked by a reporter about the timing of the deal, valued at about Cdn$12.3 billion.
If approved, Intact and Tryg would form a consortium to jointly acquire RSA. Intact would get RSA’s operations outside Scandinavia, including Canada, Britain, Ireland and the Middle East. Tryg and RSA would jointly own RSA’s operation in Denmark. Tryg would acquire RSA’s operations in Sweden and Norway.
“We have admired RSA for a long time and we believe this is a strong strategic fit,” Brindamour said.
In Canada, Intact is Canada’s biggest P&C insurer with 15.27% of the overall P&C market in 2019, according to the 2020 Canadian Underwriter Statistical Guide. RSA’s overall market share was 4.35%.
The deal still requires approval from shareholders of RSA and Tryg, an Intact spokesperson told Canadian Underwriter Wednesday. The deal, which was initially made public Nov. 5, does not require approval from Intact shareholders.
It does require regulatory approval. If all the hurdles are met, the deal is expected to close in the second quarter of 2021.
Officials with Intact and Tryg have been “comparing notes on best practices in our respective markets for a number of years,” Brindamour said during the press conference. “We both felt that RSA’s business in our respective jurisdictions were quite attractive and very good fit for each other….
“The conditions were not always right for this to work. RSA had their own plan to improve their businesses and, earlier this spring and early summer, it became clear to us that the timing would be very good to put a transaction together and really work out the strengths of the RSA platform to make this transaction possible. So it has been a long thought-out process [and a byproduct of] relationships [spread out] over many years.”
The deal calls for Tryg and RSA to buy RSA’s shares for a grand total of £7.2 billion, with Intact paying £3.0 billion and Tryg paying £4.2 billion.
Brindamour described in some detail how Intact worked with Tryg on the deal.
“It was two operators who want to learn from each other,” he explained. “In the context of building that relationship, it became very clear to us that there was an opportunity for [Tryg] in RSA, and there was an opportunity for us in RSA. As time passed, we became much bigger as an organization. [Tryg has] grown in size as well. And it led [us] naturally to say, ‘Hey, maybe we can make it work in this environment at this point in time.’”