Sampo has ruled itself out of a bid for R&SA but others could be set to pounce
After months of speculation, insurer Sampo has laid to rest speculation that it is looking to pounce on Royal & SunAlliance.
The Finnish insurance giant’s chief executive is reported to have declared that he had not the “slightest bit of interest” in the UK general insurance market.
Although Sampo has apparently ruled itself out of making a bid, there could still be other predators waiting in the wings.
R&SA has been the subject of takeover speculation for some time, with the rumour-mill gathering pace after the insurer sold off its loss-making US operations in March.
Analysts and traders have pointed to a possible tie-up with Aviva, in addition to mooting potential bids by Allianz or Fortis. Dutch insurer Aegon has also been touted.
In March, investment bank Keefe, Bruyette and Woods said R&SA would be an attractive target at its current price. “Given the large cost savings associated with an in-market merger and the resultant strong cash flow position, we believe a tie-up between Aviva and R&SA makes a lot of sense."
Aviva’s new group chief executive Andrew Moss officially takes up the helm next month. A bid for R&SA would be a bold statement to underline the start of his tenure and would help to ease the memories of the failed tie-up with Prudential.
Moss is certainly keen to develop Aviva’s global business and R&SA has a good international spread in both traditional and emerging markets.
Fortis, however, is now an unlikely predator given its current moves on Dutch bank ABN Amro.
Whether R&SA will be bought is unclear. What is certain is that the coming months will continue to be filled with speculation about the insurer’s future.
