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Hastings says talks about merger with AA insurance arm have ceased

AA confirmed it held preliminary talks with Hastings in summer to explore a merger of its insurance arm with Hastings. The talks ended without success.
AA
AA's chairman Bob Mackenzie was dismissed last month for "gross misconduct"

UK insurer Hastings Insurance Group  PLC (LON:HSTG) said talks to combine its business with AA plc's insurance division have ceased.

In two separate statements, the companies confirmed media reports about holding discussions about a potential deal.

AA said the two held preliminary talks in summer to explore a merger of its insurance arm with Hastings.

READ: Hastings Group raises first-half dividend, says “on track for another year of profitable growth”

“The AA regularly reviews all strategic options, including whether a spin-off of any of its business lines would unlock further value and be in its shareholders' interests,” the group said.

Hastings said the talks have now ended.

“Whilst Hastings regularly reviews selective acquisition opportunities, its core strategy remains to deliver on its organic growth and its disclosed targets.”

The AA is still looking to spin out its insurance division, according to the Financial Times, which first reported on the plan.

READ: Analysts weigh in on insurers Hastings and Esure after government cuts Ogden discount rate

The plan had caused a rift between members of AA’s board. Bob Mackenzie was dismissed as AA’s chairman for “gross misconduct” after a physical altercation with insurance boss Michael Lloyd last month. 

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Newswire
June 06 2014

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