Ageas has acquired Groupama Insurance Company Limited for £116m.
GICL offers a range of car, motorcycle, home, travel, personal accident and commercial insurance in the UK. It reported a post-tax profit of £25.9m in 2011.
The deal excludes Groupama’s UK broking operations and is subject to regulatory approval. It is expected to complete before the end of 2012, when GICL will become a wholly owned subsidiary of Ageas UK.
Earlier this month, Ageas announced it had entered exclusive takeover talks with GICL.
Ageas chief executive Bart De Smet says: “I welcome this acquisition on its strategic and financial merits and as an important next step in the execution of the Ageas Group strategy towards a well balanced portfolio in terms of life and non-life business.
“Following on from the start of the partnership with Tesco Bank in 2010, and more recently the acquisition of Kwik Fit Financial Services and Castle Cover, this acquisition also reflects the multi-channel, multi-brand distribution strategy of Ageas as a group and more specifically in the UK. In terms of financial merits, the return on investment is expected to exceed Ageas’s minimum return requirement of 11 per cent.”
Ageas UK chief executive Barry Smith says: “This deal is a great strategic fit in the continuing development of Ageas in the UK. Both Ageas and GICL have strong reputations in the UK broker market and this deal reinforces our ongoing commitment to brokers and their customers.
“We pride ourselves on strong relationships with brokers and today’s announcement sends a clear signal that we will continue to support and work closely with them.”
Master Adviser senior partner Roy McLoughlin says: “Ageas is obviously expanding into general insurance but this deal could also have welcome implications for the protection side of the business because it should be able to market protection products to Groupama’s existing client base.”