Private equity leads RBS talks

Buyouts group CVC has teamed up with reinsurance giant Swiss Re in a bid for Direct Line and Churchill Insurance businesses of Royal Bank of Scotland (RBS).

RBS is the second-largest general insurer in the UK and has 18,000 employees. The bid for the insurance arm of RBS is expected to value the operations at £6bn and will include Privilege, Green Flag, UKI Partnerships and NIG. Fred Watts, RBS’s former financial director is directing CVC’s bid. He joined CVC last year after working in RBS for five and a half years.

Zurich-headquartered Swiss Re group and CVC are believed to be in advanced talks about buying a 51% stake in the business. As it is still unclear how the offer will be structured reports on the deal say it is likely that the private equity group will contribute most of the capital for the deal while Swiss Re would underwrite most of the business.