RSA to sell business in Singapore and Hong Kong
25 August 2014
Category: News, Asia, Global, Hong Kong, Singapore, Europe, United Kingdom
By Derek Au
London-based RSA Insurance Group will sell its businesses in Singapore and Hong Kong to Allied World Assurance Co Ltd for around £130 million (US$215 million).
The two companies have reached an agreement to push through the deals, which are expected to complete during the first half of 2015, subject to regulatory approvals. RSA will receive approximately £130 million payable in cash, of which around £93 million is from the sale of RSA Singapore and around £37 million from that of RSA Hong Kong.
RSA expects the deals to result in a gain on sale of approximately £110 million and an addition to its tangible net assets of approximately £95 million.
RSA’s operations in Singapore and Hong Kong had total assets of £236 million and £185 million, respectively, as of the end of last year. The two branches underwrite a mix of commercial speciality and retail business.
Commenting on the disposal of the two Asian operations, Stephen Hester, RSA’s chief executive said: “This transaction builds further on the momentum of our recently announced disposals in the Baltics, Poland, Canada (Noraxis) and China, and represents continued progress against our aim of tightening the strategic focus of the group. Further disposals are targeted over the next 12-18 months to complete this process.” Earlier, he said the insurer would focus on its businesses in Scandinavia, Canada, the UK & Ireland, and Latin America.
Scott Carmilani, president and chief executive officer at Allied World, added: “This is a truly unique opportunity to acquire leading specialty businesses in key Asian markets. This transaction will significantly deepen and broaden our presence in Asia.”
Switzerland-based Allied World expects the deal to be accretive to the firm’s earnings once it completes, and an additional $90 million will likely be required to capitalise the business on an ongoing basis.