Saga Plc (SAGA.L), an insurance company, said on Monday that it has inked a deal with wholly-owned subsidiaries of the Belgian insurance firm, Ageas SA/NV, to form a 20-year affinity partnership, where in Saga will sell its certain businesses in the UK to Ageas.
Under the terms, pursuant to a business transfer agreement, Saga Services Limited or SSL will transfer certain business assets and grant certain rights relating to its motor and home insurance business to Ageas for upfront consideration of 80 million pounds in two tranches.
Ageas will take on price-comparison website distribution, pricing and underwriting, claims and customer servicing activities, with Saga retaining responsibility for brand and direct marketing.
Contingent consideration amounts of between nil and 30 million pounds in 2026, and the same again in 2032, are payable subject to certain policy volume, profitability targets, and others.
SSL will receive commission based on a percentage of the gross written premiums generated over the term of the affinity partnership.
Pursuant to a share purchase agreement, Ageas UK will acquire Saga's insurance underwriting business, Acromas Insurance Company Limited or AICL for a base consideration of 65 million pounds, and an additional consideration of 2.5 million payable, following the operational readiness date.
This transaction is expected to be closed in the second quarter of 2025. As a result of the Sale, Saga said it will forego earnings from AICL.
Mike Hazell, CEO of Saga, said, "For Saga more broadly, this agreement is in-line with our stated partnership strategy. It demonstrates clear progress as we move to pay down debt and target long-term sustainable growth - for the benefit of all our stakeholders."
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