In September, Direct Line Group (DLG) revealed its plans to sell its brokered commercial lines business to RSA – a wholly owned subsidiary of Intact Financial Corporation - subject to the approval of DLG shareholders. Now DLG has revealed that the resolution proposed has been carried by the requisite majority on a poll taken at its General Meeting today.
The following table reveals the votes cast for the resolution:
|
Resolution |
For |
% of votes cast |
Against |
% of votes cast |
Total votes |
% of issued share capital voted |
Votes withheld |
|---|---|---|---|---|---|---|---|
|
To approve the Transaction |
1,035,513,463 |
99.97 |
361,755 |
0.03 |
1,035,875,218 |
78.99% |
401,021 |
As a result, DLG said it is pleased to confirm it has satisfied the conditions of the sale of its brokered commercial insurance business lines to Intact and its subsidiary RSA Insurance Limited, for an initial consideration of £520 million, with a potential further consideration of up to £30 million, contingent upon certain earn-out provisions relating to the financial performance of the transaction.
In addition to receiving the initial consideration and the potential additional consideration, DLG estimated that over time it will release capital within the continuing group in the region of c.£270 million - of which an estimated c.£170 million will be released following the payment of the initial consideration.
In a statement issued by Intact regarding the approval of the purchase, the corporation noted that all conditions related to the acquisition have been fulfilled.
Intact stated that: “Upon closing, substantially all of the future economics of Direct Line’s brokered Commercial Lines portfolio will have been transferred to RSA effective October 1, 2023 through a quota share reinsurance agreement.”
What are your thoughts on the deal? Feel free to share them in the comment box below.
