UK - Friends Ivory & Sime (FIS) is to acquire UK money manager Royal & SunAlliance Investments (RSAI), in a deal that will secure its position among the top ten UK fund managers by assets under management.
The proceeds from the sale, worth around £240m, will be used to finance the general insurance business of parent company, Royal & SunAlliance (RSA). Last November RSA announced its intentions to gradually release around £800m from the disposal of non-core operations in its life and general sectors.
The acquisition by FIS - which is 67% owned by life assurer Friends Provident - will boost its assets under management by around 100%, to around £70bn. The firm, which specialises in socially responsible investing, currently oversees around £34.8bn in both retail and institutional funds.
At the end of 2001, RSAI had a total of £36bn of assets undermanagement. Last year, the unit generated some £10m of profit before tax, resulting in net assets of £32m.
Commenting, Bob Mendelsohn, Royal & SunAlliance's Group chief executive, said:
The sale of RSAI is part of our overall strategy to focus on our general insurance business and our core competencies of underwriting, risk and claims management.
“It is part of our disposal programme, which is intendedto release over £800m of capital during 2002 and help us to take full advantage of the encouraging environment in the general insurance market.”
Around 280 staff currently employed by RSAI will transfer to FIS. Job losses will be incured, but no details were given at this stage.
The transaction is expected to be finalised within three months, subject to regulatory approval and a favourable vote from FIS shareholders.
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