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RSA Announces Sale of Its Majority-Owned Canadian Insurance Brokerage Business
- Client News
- May 19, 2014
Practices
Paul, Weiss client RSA Insurance Group announced that it entered into an agreement to sell its majority-owned Canadian insurance brokerage business, Noraxis Capital Corporation, to a subsidiary of Arthur J. Gallagher & Co. The aggregate purchase price for the business, including minority interests but excluding excess working capital, is Cdn$500 million. After minorities, and including estimated excess working capital, RSA is expected to receive cash consideration of Cdn$441 million, subject to closing adjustments. The transaction is subject to the satisfaction of customary closing conditions, including regulatory approvals, and is expected to close in July. The transaction follows from RSA's strategy and action plan announced in February, which includes the disposal of noncore assets.
Noraxis is one of Canada's largest P&C insurance brokers, operating through six majority-owned units located throughout Canada. Noraxis was founded by RSA Canada in 1999 and provides commercial, personal and employee benefits services on a retail basis. With a 300-year heritage, RSA is one of the world's leading multinational quoted insurance groups. Arthur J. Gallagher & Co. is an international service provider and plans, designs and administers a full array of customized, cost-effective property/casualty insurance and risk management programs.
The Paul, Weiss team advising RSA includes corporate partner Adam Givertz and counsel Stephen Centa; and tax partner Scott Sontag.