By Andrea Figueras

Saga PLC said it is in exclusive negotiations with Belgium's Ageas to sell its insurance underwriting business for 67.5 million pounds ($88.2 million) and to establish a partnership for motor and home insurance.

The U.K. provider of specialized holidays and financial services for consumers over the age of 50 said Friday that Ageas will acquire Saga's Acromas Insurance Company Limited or AICL, in a transaction that is expected to be completed in the second quarter of 2025.

The companies will also establish a 20-year partnership to drive growth in Saga's motor and home insurance business. Ageas will make an upfront payment of 80 million pounds, payable at or around the go live date, expected by the end of 2025.

The London-listed group will also receive up to 30 million pounds in 2026 and in 2032 if certain policy volume and profitability targets are met.

The announcement comes as Saga has been exploring opportunities to optimize its strategic position in insurance. "We have been clear for some time that developing a partnership approach is the right strategy," Saga's Chief Executive Mike Hazell said.

Last week, the U.K. group confirmed that it entered talks with the Belgian insurer. The companies are now in exclusive negotiations, but the agreement remains subject to the parties agreeing to binding documentation.

The news of the agreement came as Saga published results for the first half. Earlier this month, it delayed the publication as it was still exploring partnership opportunities.

For the period ended July 31, it reported a widened pretax loss to 104 million pounds, from a loss of 77.8 million pounds in the year-earlier period. Revenue grew 13% to 404.8 million pounds, helped by its cruise and travel division, which continued to experience positive momentum.

While insurance continues to navigate challenging market dynamics, the strong start to the year in cruise and travel means that the group remains on track to deliver full-year underlying pretax profit broadly in line with the prior year.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

October 11, 2024 03:10 ET (07:10 GMT)

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