LONDON: Ageas, the Belgian insurer, has confirmed that it is in the preliminary stages of considering a possible offer to acquire Direct Line Insurance, the UK’s largest personal lines insurer, for £3.1 billion.
The possible offer would consist of 100 pence in cash and one new Ageas share for every 25.24047 Direct Line shares, valuing Direct Line at 233 pence per share, a 42.8% premium to its closing price on 27 February 2024.
Ageas said that the proposed transaction would strengthen its position in the UK market, where it already operates, and rebalance its business profile towards controlled entities and non-life business. It also said that the combination of Ageas’ and Direct Line’s complementary UK businesses would create a strong personal lines franchise in the UK with key positions in household and motor insurance.
Ageas added that the proposed transaction would unlock significant value and deliver accretion to its operational capital generation through the delivery of substantial operational and capital synergies. It also said that the proposed transaction would enhance its financial and strategic flexibility and underpin its progressive dividend ambitions.
Ageas said that it strongly believes that its proposal is in the interest of both Ageas’ and Direct Line’s shareholders and looks forward to further discussions with the Direct Line board.