Canadian insurer Intact raises C$3.2bn to fund RSA deal

Canadian insurer Intact Financial Corporation, which is set to  acquire RSA Insurance Group for £7.2 billion together with Scandinavian insurer Tryg, has completed a C$3.2 billion ($2.46 billion) capital raise.

Intact has completed its previously-announced private placement of 23.8 million subscription receipts to Caisse de dépôt et placement du Québec (CDPQ), Canada Pension Plan Investment Board and Ontario Teachers' Pension Plan Board for aggregate gross proceeds of approximately C$3.2 billion.

CDPQ, CPP Investments, and Ontario Teachers' have committed C$1.5 billion, C1.2 billion, and C$0.5 billion, respectively, and will be entitled to a transaction fee upon closing of the acquisition.

The proceeds from the private placement will be held in escrow and are intended to be used by Intact to fund a portion of the purchase price for its proposed acquisition of RSA, to be carried out by the Company together with Tryg A/S.

The transaction will see Intact acquire RSA's Canadian, UK and International operations for a consideration of £3 billion, and Tryg acquire its Swedish and Norwegian businesses for £4.2 billion. Both Intact and Tryg will co-own RSA's Danish business on a 50/50 economic basis.

The deal is expected to close in the second quarter of 2021, subject to approvals.

Intact said the acquisition will expand its geographical presence, as well as strengthen its leadership position in Canada, with annual premiums written expected to increase by approximately 30 percent from $10 billion to $13 billion.