RSA to sell Canadian brokerage unit Noraxis for $460 mln
By Aashika Jain
May 20 (Reuters) - British insurer RSA Insurance Group Plc said on Monday it had reached agreement to sell its majority-owned Canadian brokerage business - Noraxis Capital Corp - to U.S. insurance brokerage Arthur J. Gallagher & Co for C$500 million ($460.60 million).
One of the top 100 insurers on the FTSE said in a statement it expects to receive cash consideration of C$441 million ($406.25 million) subject to closing adjustments on completion.
The acquisition, which is subject to regulatory approval, is expected to close in July and to result in a gain of approximately 140 million pounds ($235 million).
Upon the completion of the transaction, Gallagher will hold approximately 87 percent of the equity interests in Noraxis, while 13 percent will continue to be owned by various management employees of Noraxis.
"This disposal represents further progress against our aim of tightening the strategic focus of the Group, and brings to around 540 million pounds the announced sales since our new strategy and action plan was unveiled in February," RSA chief executive Stephen Hester said in a statement late Monday.
He added that the group "would continue to evaluate further non-core disposals, some of which it expect to agree during 2014."
The transaction is expected to add approximately 225 million pounds to RSA's tangible net assets, improving the group's capital strength, the insurer said.
Under its financial restructuring plan, RSA announced the sale of three Baltic businesses and one Polish operation in April. Continued...