Belgium's Ageas to buy Esure for £1.3bn

(Sharecast News) - Belgian insurer Ageas said on Monday that it has agreed to buy UK-based digital personal lines insurer Esure from Bain Capital for £1.3bn. Ageas said the deal is "fully aligned" with its strategic priorities for M&A in Europe under 'Elevate27'.

It increases the company's European markets presence through the acquisition of a controlled entity, reinforces its positioning in the UK, generates shareholder value from the realisation of synergies and enhances cash generation, it said.

The combination of the two will create the third largest UK personal lines platform, "with a balanced and diversified distribution spanning Direct, PCW, brokers and partnerships," Ageas said.

It said the deal will enable Ageas UK to accelerate the diversification of its distribution strategy into the important PCW channel in the UK market.

Its underwriting footprint will widen Ageas UK's target customer demographics and enable growth to a top-line of £3.25bn by 2028.

Ageas chief executive Hans De Cuyper, Ageas Group said: "In recent years, Ageas has experienced significant growth in the UK, making it an increasingly important part of the group. This transaction will allow us to offer competitive value propositions to a wider customer profile via a multi-channel distribution model, positioning Ageas UK as one of the top three personal lines insurers.

"Acquiring Esure also supports our strategic ambitions of re-balancing our group profile towards businesses with high cash conversion. We remain, of course, committed to our Elevate27 financial objectives, including our commitment to a progressive dividend policy, and will observe the full synergies of this transaction in the forthcoming strategic period."

Esure CEO David McMillan said: "This transaction brings together two highly complementary businesses and creates an even stronger platform for continued innovation, growth and excellent delivery for our customers.

"Combining Ageas's scale, financial strength and excellent broker relationships with esure's strong retail brands, market-leading data capabilities and strength on PCWs, alongside a shared technology platform, will enhance our combined ability to invest in our customer proposition and open up new opportunities for growth."