RSA Insurance Group PLC (LON:RSA) has recommended the £7.2bn/685p per share takeover approach from a consortium of Intact Financial and Danish insurer Tryg.
The duo announced the approach earlier in the month and details are largely unchanged with RSA to be broken in two following the transaction.
Tryg will pay £4.2bn for RSA’s Sweden and Norway operations while for its contribution of £3bn Intact gets the UK, Canadian and some other international business The Danish operations will be co-owned and run separately.
In a statement, RSA said the acquisition will be effected by way of a court-sanctioned scheme of arrangement and shareholders will also receive the interim dividend of 8p announced in September.
The statement noted that offer is a 51% premium to the 460p market price the day before it was announced.
In the statement, Intact and Tryg said that the combination of RSA's businesses with theirs will be strategically compelling.
Intact does not have a presence in the UK and said it expects its annual premiums written to increase from approximately C$12bn to approximately C$20bn following the deal, which will also consolidate its leadership position in Canada.
The company added that it expects over C$250mln of pre-tax annual run-rate synergies within 36 months.
Tryg added that the combination with RSA's Swedish and Norwegian Businesses will create the largest property and casualty insurer in Scandinavia.
The combined pro-forma premium base of DKK 32bn represents an increase of 46% relative to Tryg's standalone premium income. Tryg also expects to generate annualised pre-tax synergies of DKK 900mln (£109mln) in 2024.