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CGNU nabs Royal Bank units
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July 17, 2000: 6:21 a.m. ET
UK insurer to pay $900M for half of Scottish bank's life, pensions divisions
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LONDON (CNNfn) - U.K. insurer CGNU Plc agreed Monday to pay £600 million ($900 million) for 50 percent of the Royal Bank of Scotland's insurance businesses, completing an agreement that enabled the Scottish bank to succeed in its hostile bid earlier this year for larger rival National Westminster Bank Plc.
Under the terms of the agreement, CGNU will own half of both Royal Scottish Assurance and National Westminster Life Assurance, the companies said.
The agreement gives the U.K.'s biggest insurer access to the bank's clientele, expanding its sales outlets as it seeks to take a greater slice of the pension and insurance market. Royal Bank of Scotland has 15 million personal customers in the U.K.
CGNU helped finance Royal Bank's £21 billion hostile acquisition of NatWest in February. Royal Bank (RBOS) stepped in with an unsolicited offer for NatWest late last year, trumping an initial bid from its local rival, Bank of Scotland (BSCT) .
"We have enjoyed excellent working relationships with CGNU and can see further possibilities for future cooperation," said Fred Goodwin, group chief executive of Royal Bank.
CGNU's annual premium income of £26 billion ranks it among the top five European life insurers, the company said. CGNU is the product of a succession of mergers between U.K. insurers in recent years, the latest being the combination earlier this year of CGU and Norwich Union.
Shares in Royal Bank of Scotland fell 13 pence, or 1.2 percent, to 1,046 pence in London Monday morning, and CGNU fell 10 pence, or 0.9 percent, to 1,085. 
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