b'Mergers & Acquisitions | Property-Casualty Sector | UK and Europeseasoned players tend to end up as successful biddersAs the RSA transaction demonstrates sometimes the when sellers are tasked with evaluating deal conditionsanswer to a disposal strategy is to consider a multi-and certainty of execution as important considerationsbuyer approach, particularly when there are a beyond simply price. This may also explain a relatednumber of competing objectives and different types trend that may be emerging which suggests privateof potential buyers in play. Hartford Financial capital might prefer to deploy its money in backingServices Group, Inc. adopted just such a strategy in start-up players such as the Convex and Fidelis exam- announcing a series of transactions during 2020 to ples, which come with no legacy liabilities to diligenceoffload its continental European operations that it and price with sufficient clarity and certainty, particu- had acquired as part of its purchase of the larly with longer-tail business. Evidence of dealsNavigators Group in 2019. The transaction involved announced in 2020 shows that strategic industrythe sale of ongoing Belgian operations to local buyers still have an advantage in bidding for competi- carrier Federale, the sale of legacy business to tors or by way of expansion into new markets andBermuda-headquartered Premia Holdings Ltd. territories whether on their own or in partnership with(Premia) and renewal rights deals for other busi-other players. Two such deals were the take-private ofness lines to MGA Castel Underwriting in the Hastings Group plc, the UK-based motor insurer by aNetherlands and to Zurich. Such carve-up-type sales consortium of South Africas Rand Merchant andprocesses can be challenging but show that when Finnish carrier Sampo. In common with other exam- one buyer doesnt emerge for the whole business an ples, the highly competitive UK motor market hadexit can still be achieved to meet a sellers objec-proved difficult for Hastings to make headway as atives. As the legacy market continues to be active, publicly traded entity since coming to market in 2015we can foresee more combination-type deals where following a sale down by Goldman Sachs. a legacy carrier such as Premia takes on the back The other deal was itself a blockbuster deal for otherbook and another live player takes on the renewal reasonssimply, its longevity made the RSA Insurancebusiness going forward. Another trend we see Group Plc (RSA) transaction stand out, as one of theemerging in the legacy space is where a trade seller London Stock Exchanges oldest companiesannounces a series of transactions for different parts announced a sale to a consortium deal from Canadasof its business with the same legacy acquirer, the Intact and Scandinavian player Tryg. The deal isadvantage being that certain deal terms can be interesting on a number of levels and marks the end ofreflected across multiple jurisdictions and sale a major turnaround operation by RSAs managementdocumentation in order to smooth the execution with the agreed offer of $9 billion representing a 52%process whilst respecting individual target sensitivi-premium to share price valuation pre-announcement,ties and regulatory conditions. Clearly, there are at the higher end of the spectrum of comparisons. Ofefficiencies to be gained from a seller engaging with particular interest is the split in the businesses, witha repeat buyer with whom a certain relationship has Intact continuing RSAs Canadian and UK operationsdeveloped from a prior transaction which can then and Tryg taking on RSAs Swedish and Norwegian linesbecome a key component in the bidding process and the bidders co-owning the Danish business. Thefrom choosing a buyer to executing a successful deal also represents a good outcome for shareholdersdeal. We see this as a real hallmark of the legacy and preferring a full cash offer where, instead of a directrunoff space in the UK, Europe and beyond. gpaper offer of consideration, both Intact and Tryg turned to a combination of their own shareholders, other pension fund investors and the debt markets to fund the transaction.MAYER BROWN 11'