Mapfre acquires Direct Line’s international operations
Mapfre is set to acquire Direct Line’s international division, which comprises its Italian and German operations. The sale concludes the strategic review initiated earlier in 2014.
The sale agreement includes certain transitional arrangements including a licence to use the Direct Line brand in Italy and Germany for three years.
Total cash sale proceeds of €550.0 million (£430.5 million) represent 1.9 times 2013 net asset value and 36.9 times 2013 normalised earnings.
Direct Line is expecting to recognise a pre-tax gain on disposal of approximately £160 million.
Paul Geddes, chief executive officer of Direct Line Group, said: "We believe that the sale of our international businesses to Mapfre is a good result for all of our stakeholders, providing excellent value for our shareholders, while offering our customers and colleagues stability and opportunity.
"Meanwhile, our UK personal and commercial lines businesses are continuing to implement the many initiatives we have under way to deliver our strategic priorities."
