Rural and regional services company Elders Ltd
(ASX:ELD) has announced the sale of its insurance arm to QBE Insurance Group Ltd
(ASX:QBE) for $315 million.
Under the deal QBE will acquire 100 per cent of Elders Insurance and 75 per cent of its agency operation.
Elders Insurance and Elders Insurance Agency are expected to generate around $500 million in gross premiums in 2010, $400 million of which will be additional premium for QBE.
QBE will also subscribe for 112.5 million Elders shares at 40 cents a share, taking QBE’s holding in Elders to 12.5 per cent.
Elders says the deal is in keeping with the company’s refinance and recapitalisation program and will significantly help strengthen its balance sheet.
QBE Insurance Group’s 2008 net profit dipped slightly from the year before.
