Intact Financial Corporation and its subsidiary RSA are set to acquire the brokered commercial lines business of UK-based Direct Line Group (DLG).
The deal has been given the green light after DLG held a shareholder vote that yielded the requisite majority.
According to DLG, votes for the transaction's approval accounted for 99.97% of the total cast during its general meeting poll.
With shareholder approval, the acquisition is now on track to be completed on October 26 upon payment of a £520 million cash consideration as the initial price, according to a news release from Intact.
The Canadian insurer, which acquired RSA in 2021, previously announced its intent to fund the DLG purchase through proceeds from a recently completed $575 million common share offering and a $400 million medium-term note issuance.
Intact's release also noted that "substantially all of the future economics of Direct Line's brokered Commercial Lines portfolio will have been transferred to RSA effective October 1, 2023."
The transfer will be made through a quota share reinsurance agreement, Intact said.
Earlier this month, Intact reported a catastrophe loss estimate of roughly $611 million for the third quarter. This figure includes losses from its Canadian segment and US commercial lines business.
Like other insurers in Canada, Intact's catastrophe losses this year were primarily driven by severe weather events, including record-breaking wildfires. During the second quarter, it reported catastrophe losses amounting to $421 million, up from $176 million in the same period last year.
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