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Insurance industry

Insurance Mergers and Acquisitions: A Year of Mega Deals

Strategic Insights

— 2 min read

The year 2000 saw a flurry of activity in the insurance industry, with several major mergers and acquisitions taking place. One of the most notable deals was the proposed merger between Norwich Union and CGU, which was valued at over £20 billion and would have created Britain's largest insurance group. Meanwhile, General Motors was keen to acquire Land Rover as part of a deal with BMW, while British Telecom faced takeover interest from at least three potential bidders. On the financial front, Prudential was set to float its Internet bank, Egg, by the end of the year, and Royal London was poised to announce a £1.2 billion takeover of United Assurance.

Key Takeaways:

  • Norwich Union and CGU proposed a merger valued at over £20 billion, creating Britain's largest insurance group.
  • General Motors sought to acquire Land Rover as part of a deal with BMW.
  • British Telecom faced takeover interest from at least three potential bidders.
  • Prudential was set to float its Internet bank, Egg, by the end of the year.
  • Royal London was poised to announce a £1.2 billion takeover of United Assurance.
  • Gordon Brown, the Chancellor, renewed his attack on BT over Internet access costs in a speech in New York.
  • Piers Morgan, editor of The Mirror, was questioned by the board of Trinity Mirror over dealings in shares of Viglen Technology.
  • Hilton Group considered a demerger of its Ladbroke betting and gaming operation, valued at about £1 billion.
  • Freeserve, the UK's largest Internet company, prepared to use its rocketing share price to fund an acquisitions spree.
  • Scottish & Newcastle prepared to sell its Center Parcs holiday operation, raising nearly £1 billion.

Statistics:

  • Proposed merger between Norwich Union and CGU valued at over £20 billion (£20 bilateral)
  • £1.2 billion takeover of United Assurance by Royal London
  • £1 billion demerger of Ladbroke betting and gaming operation by Hilton Group
  • £5 billion stock market flotation in London and New York for Yellow Pages
  • £5 billion merger between Granada and an international catering group

Sources:

  • THE SUNDAY TIMES, * Norwich Union and CGU are in merger talks that could result in the creation of an £18.8 billion insurance group.
  • THE SUNDAY TELEGRAPH, * CGU and Norwich Union will announce they are merging to create Britain's largest insurance group and the fourth-largest in Europe, valued at more than £20 billion.
  • SUNDAY BUSINESS, * Norwich Union and CGU will announce a £20 billion merger that will spark a fresh wave of consolidation in the sector.
  • THE OBSERVER, * Freeserve, the UK's largest Internet company, is preparing to use its rocketing share price to fund an acquisitions spree.
  • THE INDEPENDENT ON SUNDAY, * Norwich Union and CGU will unveil a £19 billion merger that will create Britain's biggest insurer and one of the five largest in Europe.
  • THE MAIL ON SUNDAY, * Prudential is expected to announce this week that it will float Egg, its phone and Internet banking arm.
  • SUNDAY EXPRESS, * Two London-based bankers at the centre of America's biggest money laundering scandal are assassination targets for Russian gangsters.

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