CGNU plc (CGNU) announces the acquisition of Fortis Australia Limited (FAL) from Fortis Group for A$293 million (£111 million) in cash. In addition Fortis will receive a dividend of A$37 million (£14 million) from FAL prior to completion.
CGNU plc (CGNU) announces the acquisition of Fortis Australia Limited (FAL) from Fortis Group for A$293 million (Ł111 million) in cash. In addition Fortis will receive a dividend of A$37 million (Ł14 million) from FAL prior to completion.
The FAL operations are principally in general insurance but also include a small life insurance business.
FAL has a strong business fit with CGNU's existing Australian general insurance operations. The acquisition will create the market leader in both the motor dealer and financial institution distribution channels, areas in which CGNU is already strong.
FAL had net written premiums of A$269 million (Ł102 million) in 2000, of which 71% were personal lines, and made a profit after tax of A$35 million (Ł13 million). The combined operating ratio for 2000 was 99% and net assets at 31 December 2000 were A$234 million (Ł89 million).
The major operations of both CGNU and FAL are in Melbourne and CGNU expects to reduce FAL's operating costs by some 40%, which would generate estimated annualised pre-tax cost savings of A$23 million (Ł9 million).
The transaction is subject to regulatory approval and is expected to complete by the end of the third quarter 2001.
Philip Twyman, group executive director for CGNU said:
"This is a focused acquisition which reinforces our top five position in the Australian general insurance market, where premium rates continue to harden. It also provides opportunities for cost savings from a business that is already performing well."
Enquiries:
| Analysts/Investors | |
| James Matthews, Head of Investor Relations | +44 (0) 20 7662 2137 |
| Media | |
| Ian Frater, Head of Group Media Relations | +44 (0) 20 7662 8221 |
| Alex Child-Villiers, Financial Dynamics | +44 (0) 20 7269 7107 |
Notes to editors:
CGNU is the world's sixth-largest insurance group and the largest insurer in the UK. It has worldwide premium and investment sales from ongoing business of Ł27 billion and more than Ł210 billion in assets under management.
CGNU has long-term savings, investment and general insurance businesses in Australia including its 'fund of funds' open architecture business, Navigator. In 2000 the Australian general insurance business had net written premiums of A$1,152 million (Ł438 million) and a combined operating ratio of 103%.
Exchange rate: Ł1: A$2.63