HAMPSHIRE, United Kingdom, Sept. 21 -- Ageas UK issued the following news release:
Following the announcement of exclusive discussions on 7 September 2012, Ageas today confirms the signing of an agreement to acquire Groupama Insurance Company Limited for a total consideration of GBP 116 million (EUR 145 million). The acquisition will propel Ageas to fifth largest UK Non-Life insurer (with a 5.2% market share); fourth largest Private Motor insurer (with a 11.7% market share); and fourth largest Personal lines insurer (with a 7.1% market share).
The acquisition represents a strong strategic fit and complements Ageas UK's multi-channel distribution approach, strengthening its presence in the UK broker market. GICL offers a range of car, motorcycle, home, travel, personal accident and commercial insurance in the UK, further strengthening Ageas's existing portfolio as well as adding new niche product areas. This transaction excludes Groupama's UK broking operations.
Based on 2011 Non-Life income of Ageas UK and GICL, the annual inflows (or gross written premiums) of Ageas UK as a result of the acquisition would increase by around 20% on a pro forma basis, amounting to over GBP 2.1 billion (EUR 2.4 billion). In terms of operational performance, GICL reported a 2011 post tax profit of GBP 25.9 million (EUR 29.8 million) and a combined ratio of 97.8% (FY2011).
The deal is subject to regulatory approvals and closing is expected before the end of 2012. On completion of the transaction, GICL will become a wholly owned subsidiary of Ageas UK.
Announcing the transaction, Bart De Smet, CEO of Ageas, said: "I welcome this acquisition on its strategic and financial merits and as an important next step in the execution of the Ageas Group strategy towards a well balanced portfolio in terms of Life and Non-Life business. Following on from the start of the partnership with Tesco Bank in 2010, and more recently the acquisition of Kwik Fit Financial Services and Castle Cover, this acquisition also reflects the multi-channel, multi-brand distribution strategy of Ageas as a group and more specifically in the UK. In terms of financial merits, the return on investment is expected to exceed Ageas's minimum return requirement of 11%."
Barry Smith, CEO of Ageas UK, added: "This deal is a great strategic fit in the continuing development of Ageas in the UK. Both Ageas and GICL have strong reputations in the UK broker market and this deal reinforces our ongoing commitment to brokers and their customers. We pride ourselves on strong relationships with brokers and today's announcement sends a clear signal that we will continue to support and work closely with them. The complementary strengths of Ageas and GICL will create an exciting business focused on customer needs whilst generating a greater return for our company."
TNS C-PreetiSi97 120922-mv45-4040703