Direct Line Agrees Sale of Brokered Commercial Insurance Business for Up to GBP550 Million
07 September 2023 - 9:04AM
Dow Jones News
By Joe Hoppe
Direct Line said it has agreed to sell its brokered commercial
insurance business lines to Intact Financial Corp. for potentially
up to 550 million pounds ($687.9 million).
The non-life insurer said Thursday it will sell the business to
Intact's subsidiary RSA Insurance for an initial consideration of
GBP520 million, and a potential further consideration of up to
GBP30 million, contingent on financial performance. Transfer of the
operational assets and liabilities to RSA is targeted for the
second quarter of 2024.
Along with the consideration and earn-out, Direct Line estimates
over time it will release capital of up to GBP270 million. Proceeds
from the sale will be used to enhance the company's capital
strength and for general corporate purposes.
Direct Line will remain active in the direct small business
commercial lines insurance space through its brands "Direct Line"
and "Churchill".
The value created for shareholders will allow the group to
improve its capital resilience and provides a platform for improved
performance," Acting Chief Executive Jon Greenwood said.
Given the size of the transaction, it is subject to shareholder
approval. A notice of general meeting will be published as soon as
practicable.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
September 07, 2023 02:49 ET (06:49 GMT)
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