The commentary discusses Intact Financial Corporation’s (Intact or the Company; rated "A" with a Stable trend by DBRS Morningstar) announced proposal for a joint bid with Tryg A/S, a Scandinavian insurance company, to acquire RSA Insurance Group plc (RSA) for a total cash consideration of approximately GBP 7.2 billion (CAD 12.3 billion). If successful, this transaction would further strengthen Intact's franchise by positioning the Company as a strong multijurisdictional property and casualty (P&C) insurer. DBRS Morningstar projects that the Company’s annual direct premiums written will increase to approximately CAD 20 billion from CAD 12 billion if the deal goes through. This deal would also enhance Intact's presence in the global P&C specialty lines market.
The commentary highlights the following:
-- RSA provides an opportunity for Intact to further diversify by product and geography.
-- The disclosed terms of the proposal state that Intact would acquire RSA’s Canada and UK & International businesses and obligations while Tryg would acquire RSA’s businesses in Norway and Sweden.
-- Potential challenges to the deal include multiple regulatory oversight, increased operational, and integration risk.
“If completed, this will be Intact's largest acquisition to date and the largest deal so far by a Canadian P&C insurer in history,” said Victor Adesanya, Vice President, Global Financial Institutions Group, at DBRS Morningstar.
Growth Opportunities and Geographic Diversification—Intact Partners with Tryg in Potential Joint Bid to Acquire RSA.
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