It will enable Edinburgh-based Tesco Bank to create an end-to-end insurance business, it said.
Aside from the cash element, Tesco will benefit from any change in net asset value in Ageas’s share realised by Tesco Underwriting from 30 June until closing.
Ageas will receive a reimbursement of an internal loan for an amount of £21m.
The acquisition will be funded from Tesco Bank’s cash reserves. All parties will work closely to ensure a smooth transition ahead of the formal change in control, which is expected to take place in the second quarter of 2021.
Terry Murden Editor Daily Business 26th October, 2020
Tesco Underwriting may choose to continue with its current arrangements whereby TU uses the Ageas supply chain to fulfil its repair requirements. On the other hand, TU may choose an alternative form of supply
Further change in the UK insurance market.
Tesco Bank has acquired Ageas’s 50.1% stake in Tesco Underwriting in a deal worth £104m, confirming its interest reported in Daily Business last November.