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Corroon set for takeover
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July 22, 1998: 6:43 a.m. ET
Kohlberg Kravis Roberts group to buy British insurance broker for $1.4B
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NEW YORK (CNNfn) - British insurance brokers Willis Corroon Group Plc said Wednesday it had agreed to a takeover by a new company especially formed by Kohlberg Kravis Roberts & Co. for the purpose in an offer that valued the group at 851 million pounds ($1.4 billion).
The new company, Trinity Acquisition Plc, has been formed by a consortium backed by the well-known investment fund and five major insurance groups: Guardian Royal Exchange, Royal & Sun Alliance, The Chubb Corp., The Hartford Financial Services Group and Travelers Property Casualty Corp.
The acquisition comes amid consolidation
in the U.K. insurance industry as companies cut costs in the face of reduced premium rates.
Trinity has offered 200 pence in cash for each Willis Corroon share and 10 pounds ($16.47) in cash for each of its American Depository Receipts, the insurance broker said in a statement.
Willis Corroon's share price closed at 178.5 pence on Tuesday, indicating a premium of around 12 percent. The share price was quoted at 195 pence on Wednesday morning.
KKR (KKR) would initially own 81 percent of Willis Corroon's ordinary share capital representing an investment of up to 165 million pounds ($271.6 million) while the five insurance groups would hold the remaining 19 percent representing 39 million pounds ($64.2 million).
KKR, through its KKR Fund, has agreed to invest up to 165 million pounds in the Trinity Group and would provide bridge financing of up to $575 million.
The five insurance groups have agreed to invest an aggregate of 193 million pounds ($317.9 million) in the Trinity group.
Seven Willis Corroon senior executives have agreed to participate in the KKR bid and will keep their positions.
Willis Corroon shares climbed 17 pence, or 9.5 percent, to 195.5p in early trading on the British market. Shares of Willis Corroon (WCG) closed at 14-11/16, down 1/8 in Tuesday trading on the American market. 
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Willis Corroon Group
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