Aviva rejects sales negotiations with RSA
British insurer rebuffs £5bn bid from rival firm
British insurer Aviva has rejected the prospect of sales negotiations with rival firm RSA.
The company rebuffed an approach from RSA to buy its general insurance businesses in the UK, Ireland and Canada.
Lord Sharman, Aviva's chairman, claimed the firm's board had decided shareholders would benefit from retaining the business.
He said: "Given the compelling strategic and financial benefits to Aviva shareholders of retaining the general insurance business, its upside potential and the terms offered by RSA, the board was unanimous in rejecting this proposal".
RSA made the conditional offer on July 28th and it was rejected on August 6th.
Aviva claims the bid does not adequately value the business, stating that the general insurance sector is at a "cyclical low".
The firm's general insurance business made an operating profit of £1 billion in 2009, compared with £1.7 billion in 2006, highlighting the volatile nature of the industry.
An improved offer may now be made, with analysts from UBS claiming the move would allow RSA to significantly expand its operations.