Edinburgh-based Tesco Bank’s chief executive Gerry Mallon described the acquisition of Ageas’s holding in Tesco Underwriting as a “significant step” in the financial division’s development.
Tesco Bank will acquire Ageas’s 50.1 per cent stake in the underwriting joint venture for a total of £104 million plus Ageas’s part of any change in net asset value realised by Tesco Underwriting from 30 June until closing of the deal. In addition, Ageas will receive a reimbursement of an internal loan for an amount of £21m.
The bank said all parties would 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.
Bosses said the partnership had been valuable for both Tesco Bank and Ageas since the joint venture was established ten years ago, underwriting Tesco Bank-branded car and home insurance policies that have “proved popular with customers”. In 2014, the partnership was extended for a further seven years, to 2021.
The bank added: “This investment is in line with Tesco Bank’s strategy of focusing on propositions which better meet the needs of Tesco shoppers, and builds on the unique offering insurance customers already benefit from as part of the wider Tesco family, such as the guaranteed Clubcard discount.”
Ageas is to focus on developing its core business and broker distribution channel.
Mallon said: “[This] announcement is a significant step in Tesco Bank’s development which underlines our commitment to the insurance market and our customers.
“We look forward to doing more of what we know our customers want – offering products that have a strong emphasis on value,