British insurer RSA has received a £7.2 billion ($9.55 billion) cash offer from Canada's Intact Financial and Denmark's Tryg, it said on Wednesday, in one of Europe's biggest financial takeover bids this year.
RSA said its directors had backed the bid unanimously and recommended that shareholders vote in favor of the consortium's offer, which the insurer first flagged earlier this month.
Best known in Britain for its More Than brand, RSA provides home, motor and commercial insurance and has large operations in Canada, Ireland and Scandinavia.
If successful, the suitors would carve up RSA, with Intact keeping RSA's Canada, U.K. and international operations while Tryg would take control of its Sweden and Norway businesses. The pair would also co-own RSA's Danish unit.
Tryg would pay £4.2 billion while Intact would contribute £3 billion, with the overall offer representing a 51% premium to RSA's Nov. 4 closing share price of 460 pence.
"Our deep knowledge of these markets makes us ideally placed to integrate, operate and enhance the value of our combined group over the long term," Tryg CEO Morten Hubbe said in a statement.
Activist investor and RSA's largest shareholder Cevian Capital said it fully supported the takeover.
"We assess that the long-term competitiveness of RSA's business will benefit from combining with Tryg and Intact, the best-performing non-life companies in their respective geographies," said Christer Gardell, managing partner and co-founder of Cevian, which owns a 14.1% stake in RSA.
Gardell added that RSA Chief Executive Stephen Hester — a former boss of NatWest — had put the insurer on a better footing.
Since joining in 2014, Hester has shored up the company's balance sheet with a £773 million rights issue and scaled back underperforming operations.