Insurance merger tipped
New Zealand's general insurance market could be in for a significant shake-up if a suggested British merger proceeds.
Friday, July 2nd 1999, 12:00AM
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US FED RISES RATES 0.25% The United States Federal Reserve has raised interest rates by 25 basis points. The news was well received by the US sharemarket, with the Dow Jones rallied after the announcement. The 30 year bond moved back under 6 per cent. Federal Reserve chairman Alan Greenspan indicated that this was a one-off tightening, rather than the first of a series of rate increases. He also indicated that the Fed had moved from a tightening bias back to one of neutrality. |
CGU, formed last year by the merger of Commercial Union and General Accident, is Britain's second largest insurer. It is said to be considering making 10 billion pound offer for its rival Royal & SunAlliance.
The combined group would have a market value of more than 22 billion and its would also replace Prudential as Britain's leading insurer.
Reports from London suggest an all-share offer could come within weeks.
While Royal & SunAlliance has been busily acquiring other business in Australia and New Zealand in recent years, its share price in London has fallen from a high of 800p to 540p.
A bid from CGU could trigger counter offers from other companies on the acquisition trail.
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