Hastings agrees £1.66bn cash acquisition by Sampo and RMI

UK property & casualty (P&C) insurance company Hastings Group Holdings has received a cash offer from Sampo and Rand Merchant Investment Holdings (RMI) to acquire all issued and to be issued share capital not already owned or controlled by them.

Sampo is a Nordic insurance group with a market capitalisation of approximately €17.6 billion. RMI is a South African financial services investment holding company. Together, the pair owned or controlled Hastings Shares representing approximately 29.7 percent.

For the purposes of acquiring Hastings, Sampo and RMI have entered into a newly-formed jointly owned company, called Dorset Bidco, registered in England and Wales, which made an offer to Hastings valuing its entire issued and to be issued share capital at approximately £1.66 billion (€1.84 billion).

Following completion of the offer, Sampo will own 70 percent and RMI will own 30 percent of the shares of Hastings. The size of Sampo’s investment would be £1.16 billion valued at the offer price.

Sampo expects to fund its part of the acquisition with approximately €1 billion of newly issued hybrid Tier 2 capital with the residual coming from existing cash resources.

Sampo said the acquisition is a part of its strategic ambition to expand further into property & casualty insurance, and expand beyond its current footprint. The Nordic insurer believes that the UK offers an attractive scale opportunity.

Torbjörn Magnusson, chief executive officer of Sampo, said: "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."

Herman Bosman, chief executive officer of RMI, added: "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."

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. This is in line with our focus of generating value for shareholders and reflects the quality of our business. 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."