Ping An Drops Out Of Auction For RBS Insurance Division
Ping An, the Chinese insurer, has dropped out of the bidding for the Royal Bank of Scotland insurance arm which is up for sale at £7 billion. The division, which includes Direct Line, Churchill and Privilege has been the centre of much interest but a number of potential buyers have pulled out of late. So will the sale still proceed?
While at this moment in time there are still 5 potential buyers left in the race there is pressure on the £7 billion price tag. Many in the City believe that ongoing pressure on the economy will force RBS to either cancel the sale, or accept a lower offer (something which the Group has denied). However a close look at the auction shows that Zurich Financial Services, Allstate, Travelers, American International Group and Allianz are the remaining bidders – all based overseas.
Many observers believe that the lack of a UK bidder has changed the chances of a successful sale as the remaining bidders would find it difficult to match the potential cost savings for a UK buyer. The sale of the insurance division is an important part of the planned restructuring of the company’s finances and a ‘no sale’ will be bitterly disappointing.
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