Aviva rejects 5-bn pounds offer for its general insurance biz

LONDON: British insurer Aviva Plc on Monday said it has rejected rival RSA's five-billion pound takeover offer for some of its general insurance business, on grounds that the deal will not be in the best interest of shareholders.

RSA Insurance Group Plc had offered to buy Aviva's general insurance businesses in the UK, Ireland and Canada excluding RAC and Health, for a cash consideration of five billion pounds.

The Aviva board has concluded that RSA's proposal was "unacceptable and not in the best interests of Aviva shareholders," the company said in a statement.

The decision to reject the offer was communicated to the RSA chairman on August 6, it added.

In a separate statement, RSA said Aviva rejected the proposal "without any discussions taking place".

"RSA considers that its proposal represents fair value for the target businesses... RSA remains open to discussions with Aviva," it noted.

In recent weeks, speculation was rife that Aviva had received an offer from RSA but confirmation came only today.

According to Aviva, the proposal would have left the pension liabilities of the GI business with Aviva as well as general insurance businesses in the Netherlands, France, Italy, Poland, Turkey and Singapore.

Aviva is a leading player in the UK, Ireland and Canada. The entity also has a good presence in India.

"Given the compelling strategic and financial benefits to Aviva shareholders of retaining the GI business, its upside potential and the terms offered by RSA, the Board was unanimous in rejecting this proposal," Aviva chairman Lord Sharman said.