Finnish insurer Sampo and South African investment firm RMI have bid £1.66 billion to acquire Hastings Group.
RMI already owns a 29.7% stake in the UK insurer. Following completion of the acquisition, Sampo will own 70% of Hastings and RMI’s holding will increase to 30%.
As part of the cash acquisition, Hastings investors will receive 250p for each share.
Sampo plans to expand further into non-life insurance through the acquisition of Hastings. It sees the large retail property and casualty insurer as an attractive scale opportunity, particularly in the motor insurance market.
The prospective new owners of Hastings also believe that there are a number of the insurer’s operations that can be improved, including claims handling sophistication, expansion into home insurance, customer retention and reinsurance strategy.
Commenting on the Sampo and RMI bid, Thomas Colraine, chairman of Hastings, said: “I am pleased to announce the recommended cash offer for Hastings which represents a very attractive proposition for Hastings shareholders with a significant premium in cash.”
“Hastings has grown since its IPO in 2015 and is a leading motor insurer in the UK as well as having diversified into other products such as home insurance. Hastings is an agile and digitally focused player and together with the strengths of Sampo and RMI, I am confident the business will be well positioned in the future to ensure enhanced outcomes for our colleagues, customers and stakeholders.”
Herman Bosman, chief executive officer of RMI, said: “Having been the largest shareholder in Hastings since 2017, we remain excited about the prospects of the business and believe the company will thrive in a private environment.”
“We are delighted to partner with Sampo, who we consider one of the most successful owners of P&C insurance businesses in Europe, in developing Hastings over the long-term. We strongly believe this transaction is in the best interest of all Hastings stakeholders including its customers and many talented employees.”
Torbjörn Magnusson, chief executive officer of Sampo, added: “The acquisition of Hastings is in line with Sampo’s strategic ambition to expand in P&C insurance. Hastings is a modern, innovative P&C insurer with leading digital capabilities in one of Europe’s largest P&C markets.”
“We are excited to make this investment together with RMI, with whom we share a similar investment philosophy. We very much look forward to partnering with RMI and the Hastings management team and will bring all our expertise to bear to support Hastings in realising its full potential.”