Saga said it is in ‘exclusive negotiations’ with a Belgian rival over a tie-up for its troubled insurance arm.
As it announced a surge in profits on the back of booming demand for its cruises, the over-50s group also said it has agreed to sell its insurance writing business to the same firm, Ageas, for £67.5m.
The update sent shares in Saga up 9.1 per cent, or 11.4p, to 136.4p.
The companies last week said they were holding talks over a potential deal, which would help it to reduce its debt burden.
Saga told its shareholders yesterday it is in exclusive negotiations with Ageas to establish a 20-year partnership for motor and home insurance.
Plain sailing?: Saga announced a surge in profits on the back of booming demand for its cruises
Ageas UK would run Saga’s motor and home products, which consisted of gross written premiums in excess of £479m for the year to July. Ageas will pay £80m up front as part of the deal, with this potentially increasing if certain targets are met.
The firms also confirmed that Ageas will buy Saga’s Acromas insurance underwriting business. Ageas UK will pay £67.5m for the business in a deal expected to complete in the second quarter of next year.
Saga boss Mike Hazell said: ‘We are hugely excited at the opportunity to grow our home and motor insurance business through this proposed partnership with Ageas.’
Ant Middle, chief executive of Ageas UK, said: ‘This proposed deal with Saga aligns perfectly with our strategy to profitably grow in UK personal lines and in creating powerful partnerships to the benefit of our customers.’
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