RSA Insurance sells Latin American business for £403m

RSA, which has caught the eye of Zurich Insurance, said the Swiss insurer has been made aware of the sales process in recent discussions and the transaction is not conditional on the outcome of their possible offer for RSA.

Chief executive Stephen Hester said: “With RSA’s focus on its largest markets in the UK & Ireland, Scandinavia and Canada, it has become increasingly clear to us that RSA is no longer the best strategic owner of these businesses. In Suramericana we have an experienced and committed regional player who can make the business a much more central part of their strategy.”

RSA added that the deal is expected to be strongly accretive to capital, enhancing its operational flexibility. It added that the disposal is consistent with its stated target to substantially complete its strategic refocus by the 2015 year end results announcement.

Nomura said the disposal was "incrementally positive" for the Zurich/RSA deal to go through.

“LatAm was a low returning business, and although there will be slightly less synergies, we believe this overall creates more value for Zurich at possible offer price of 550p versus previously,” it said.

Meanwhile, Shore Capital said that although the deal has taken a long time to complete, the ultimate price represents a good exit premium for RSA and delivers a further tidying up exercise for the group either as an independent business or as part of Zurich Insurance.

“We still believe that a deal with Zurich is possible and see little reason to doubt that 550p is the basis of these discussions,” it added.

At 1207 BST, RSA shares were up 0.7% at 507p.