Insurance company RSA to offload Russia, Middle East operations
28 September 2015
Insurance company Royal Sun Alliance (RSA) plans to offload its operations in Russia and the Middle East in a bid to strengthen its position after Swiss giant Zurich Insurance cancelled its plans to take over its rival.
RSA was hoping to generate around £80-£90 million from the disposals, which it planned to complete within a few months, The Sunday Times.
The sale forms part of chief executive Stephen Hester's restructuring of the business, which had included the disposal of other overseas operations.
In a move that came as a surprise to the market Zurich walked away from its plan to acquire the FTSE 100 company in a deal worth £5.6 billion.
Zurich's announcement came a day before a Takeover Panel deadline to mount a bid or walk away. It blamed costs from heavy claims from an explosion in Tianjin, China as also problems in Zurich's US car insurance business that led the company to review its general insurance division.
The news took RSA chairman Martin Scicluna and RSA chief executive Stephen Hester by surprise last Sunday evening, when they received a request to hastily arrange a conference call with Zurich chairman Tom de Swaan and chief executive Martin Senn, The Telegraph reported.
''They said that because they've got issues in their own business they were not going to make the formal offer and it was therefore game over,'' the 64-year-old Scicluna, told Andrew Cage of The Telegraph in an interview.
''They have confirmed to us very, very clearly that this has absolutely nothing to do with anything in the due diligence results.
''They were positive about our people and performance and nothing has happened that changed the business case. It could not have been clearer from that point of view.''
''It was a surprise,'' says Scicluna, ''but they told us that they had only heard [of Zurich's issues] in the last few days. So we said that if they have decided that they have issues in their business that they need to fix, that's their prerogative and we have to deal with it.''