|Bid||674.60 x 0|
|Ask||674.80 x 0|
|Day's range||674.40 - 677.00|
|52-week range||321.20 - 736.84|
|Beta (5Y monthly)||0.56|
|PE ratio (TTM)||21.97|
|Earnings date||25 Feb 2021 - 01 Mar 2021|
|Forward dividend & yield||0.08 (1.19%)|
|Ex-dividend date||12 Nov 2020|
|1y target est||643.31|
(Bloomberg) -- After a decade of buying up rivals to become Canada’s largest property and casualty insurer, Intact Financial Corp. is looking across the Atlantic with its biggest deal yet.Intact sealed an agreement Wednesday to buy the Canada, U.K. and international operations of London’s RSA Insurance Group Plc as part of a C$12.3 billion ($9.4 billion) transaction. Denmark’s Tryg A/S is taking RSA’s Swedish and Norwegian operations.Intact’s portion of the deal is C$5.1 billion and brings it into entirely new markets in Europe while bulking up its core Canadian business. It supercharges an acquisition spree that has turned the Toronto-based company into the dominant force in Canada’s non-life insurance industry, a little more than a decade after it was cast off by Dutch insurer ING Groep NV.The RSA deal also will be a major test of whether Chief Executive Officer Charles Brindamour, 50, can replicate the firm’s success in digesting acquisitions on a larger scale and farther afield than it has ever attempted before.“We have an established track record of integrating companies,” Brindamour said during a press conference on Wednesday. “We’ve done that many times in the past. We feel that we are in a strong position to tackle that challenge.”Spinoff SuccessIntact traces its roots back to 1809, when a group of businessmen formed the Halifax Fire Insurance Association. That firm was acquired in the 1950s by a Dutch insurer that eventually became part of ING. In 2009, ING divested its 70% stake in ING Canada Inc., which changed its name to Intact.Brindamour, who had become CEO about a year earlier, wasted little time in bulking up the newly independent insurer. Intact bought French insurer Axa SA’s Canadian business in 2011, bolstering its domestic premiums by almost 50%.Intact went on to make 12 more deals with a total announced value of about $3.1 billion before the RSA acquisition, according to data compiled by Bloomberg. The firm serves about one in five families and one in four small- and medium-sized businesses in Canada, Brindamour said.So far, the strategy has been rewarded. The company’s shares have risen more than fourfold from May 19, 2009, the day its listing as Intact became official. That compares with a 67% gain for the S&P/TSX Composite Index. Intact’s market value of about C$21 billion is up about fivefold in that time.The shares slid 1.6% to C$145.49 at 10:06 a.m. in Toronto, following a 0.6% gain on Wednesday after the deal was announced.Intact has benefited from being an independent, publicly traded company competing against policyholder-owned insurers that can’t make deals the same way, said Victor Adesanya, an analyst with DBRS Morningstar. The company also has a track record of making its acquisitions profitable by spotting trends in the market and exiting unprofitable business lines, he said.“They’re able to deploy advanced data analytics when it comes to risk selection, segmentation and identifying risk,” Adesanya said in an interview. “They do this better than others in the industry.”The RSA takeover -- the largest ever by a Canadian property and casualty insurer -- will put that system to the test. For one, it will add significant bulk to the company, increasing annual premiums in Canada from C$10 billion to about C$13 billion and boosting total premiums about 67% to C$20 billion.Intact’s workforce will balloon 63% to 26,000, its specialty-insurance business will grow by 30%, and it will be navigating unfamiliar regulatory environments in the U.K., Ireland and Denmark.Brindamour says he has admired RSA for a long time and has thought deeply about the complexity of an acquisition. He said he’s comfortable with the deal now because RSA’s businesses have leadership positions and Intact’s existing operations are in “very good shape.”He said his company’s net operating income per share has grown at a 10% compound annual rate over the past decade and revenue growth has exceeded the industry’s by about 4% a year over that time.“The reason why acquisitions make sense for us is because we’re an outperformer in the markets where we operate,” Brindamour said.(Updates share-price move in 10th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- RSA Insurance Group Plc accepted a 7.2 billion-pound ($9.6 billion) takeover offer from Canada’s Intact Financial Corp. and Danish insurer Tryg A/S, the biggest acquisition of a U.K.-listed company this year.The bid is about 50% more than the share price on Nov. 4, the last business day before Bloomberg News reported the takeover talks. That’s the highest premium paid in a European insurance deal for a decade, RSA Chief Executive Officer Stephen Hester said on a call with journalists after the announcement on Wednesday.For Hester, who said he’ll leave RSA when the takeover is completed and the company is split up, the deal would culminate a program of cutting costs and selling assets since he joined in 2014 in what observers saw as preparation for a potential sale. Activist investor Cevian Capital, RSA’s largest shareholder, said Hester had brought about a “strategic and operational transformation” of the company.“RSA has become more focused and profitable while its risk level and volatility have been reduced,” Cevian said in an emailed statement on Wednesday. “This has enabled RSA to participate in the ongoing global consolidation of the property and casualty insurance industry from a position of strength.”Insurers have been seeking to gain scale as they grapple with the impact of low interest rates and the coronavirus pandemic. The purchase of RSA would be the biggest takeover of an insurer announced this year, surpassing KKR & Co.’s acquisition of the former life insurance arm of Goldman Sachs Group Inc. for more than $4 billion.If the deal wins approval from shareholders and regulators, it would also provide Hester with a windfall. His stake of just over 1 million shares would be worth about 7 million pounds at the sale price of 685 pence per share.RSA shares rose as much as 4% in London trading on Wednesday morning, taking their gain this year to about 19%.Hester said RSA’s transformation over the past six years, including record underwriting profits in three of the last four years, helped it secure a high sale price. It has also posted strong profits in the face of difficult markets, and has restructured its management team, he said.RSA is set to be broken up under the plan, with Intact keeping its Canadian and U.K. and international operations. Tryg would take the Swedish and Norwegian operations, which will help make it Scandinavia’s biggest listed property and casualty insurer. RSA’s Danish business would be jointly owned by the two firms. Tryg will pay about 4.2 billion pounds and Intact will pay about 3 billion pounds.A small number of jobs are expected to go at RSA’s corporate headquarters in London as well as a likely modest number of roles in Canada and Scandinavia, Hester said.RSA, which traces its roots back to 1706, offers a range of general and specialty insurance products and has long been viewed as a possible takeover target. In 2015, Zurich Insurance Group AG abandoned a 5.6 billion-pound offer for RSA after an explosion at a Chinese port triggered losses in its own business.Under the terms of the agreement, RSA shareholders will still receive a planned divided of 8 pence per share that will be paid in December.(Updates with CEO comments starting in second paragraph, Cevian comments from third, share price in seventh)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Canada's Intact and Danish insurer Tryg will buy RSA in an all-cash deal if investors approve the transaction.