News Story

Zurich Insurance has unveiled a proposal to buy London-listed rival Beazley in a deal worth around £7.7 billion.

The Swiss insurer said it had tabled a potential offer of £12.80 a share, up from an earlier and previously undisclosed approach for £12.30 a share on January 4.

Shares in Beazley soared to an all-time high after the proposal was made public, with the stock surging by 42% in afternoon trading on Monday, giving the FTSE 100 specialist insurer a market capitalisation of nearly £7 billion.

Zurich said its latest approach marked a 56% premium on the value of Beazley shares on January 16, before the proposal was made public.

It believes its proposed offer “provides Beazley shareholders immediate and certain cash value for their investment at a level that exceeds what Beazley could achieve over a reasonable timeframe through the execution of its strategy”.

Zurich added: “The transaction would create a global leader in specialty insurance with around 15 billion US dollars (£11.2 billion) of gross written premiums, exceptional data availability and underwriting expertise, leading market and distribution capabilities and outstanding reinsurance and technology infrastructures.

“This combination of two highly complementary businesses would establish a leading global specialty platform, based in the UK which would also leverage Beazley’s Lloyd’s of London presence.”

Zurich said it would fund the deal through existing cash and debt facilities, with the remainder through an equity placing.

It has until February 16 to either make a formal offer to buy Lloyd’s of London insurer Beazley or walk away under UK Takeover Panel rules.

Zurich has more than 63,000 employees and is headquartered in Switzerland.