Insurance merger is off
RSA shares crash as Zurich pulls out of £5.6bn bid talks
Shares in RSA plummeted after Zurich withdrew its interest in bidding for the British insurer. The Geneva-based company had until tomorrow to lodge an offer expected to value RSA at £5.6 billion, but said it was abandoning its plans which it first unveiled in July.
It said the decision came after an expected loss in its general insurance business in the third quarter.
RSA, whose chief executive is former RBS boss Stephen Hester, had said last month that it would recommend an offer in the region of 550p a share.
Shares in the company fell 105p to 404p when the stock market opened this morning.
In a statement, RSA said: “Zurich has confirmed to RSA that the due diligence findings were in line with their expectations and, while the process had not been finally concluded, they had not found anything that would have prevented them from proceeding with the transaction on the terms announced on 25 August 2015.
“Zurich’s interest in acquiring RSA, which was announced on 28 July 2015, was unsolicited. Since that time, RSA has continued to make good progress in the delivery of its Action Plans, as evidenced by our half year results. Trading results for July and August have been positive and ahead of our expectations. Additionally, we have announced the sale of our Latin America business, the principal outstanding piece of our strategic refocus programme.
“The board and management of RSA look forward to the future with confidence in its prospects and to next updating the market at the Q3 interim management statement on 5 November 2015.”
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