February 3, 2011

What would you call a merged entity created from the marriage of RSA and Aviva? RSiva, perhaps. Or Avisa? Doesn’t really matter, because Insurance Times claims it will never happen.

How do they know? Simples: they asked Barrie Corney, analyst with Scottish “stockbroking firm” Panmure Gordon. Or rather they cobbled something together based on an investment note what he wrote.

A merger between the two remaining giants of the UK insurance scene would make sense, Corney claims, but will not happen due to a surfeit of hurdles.

With both companies having recently made multimillion GBP bids for some or all of one another – with Aviva most recently offering 140 Niños for RSA – speculation is, as they say, rife. A merger would at least stop the pair arguing about which is the oldest surviving insurance company in the land.

“Whilst we can see the logic for such a combination,” Bazza wrote, “as highlighted by RSA when it made its offer for most of Aviva’s non-life operation last summer, we think that RSA’s current share price will preclude any such acquisition.”

“A valuation towards £7bn or circa 208p a share,” for the “well managed” RSA “seems highly speculative and rather unlikely in our view,” he continued, unlike this story which comes to an abrupt halt right here.


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