(Refiled to correct punctuation in first two paragraphs)
* RSA sells out of three Baltic businesses, one Polish
* Deal valued at 360 mln euros, PZU's largest ever deal
* First major disposal under new plan to boost finances
* PZU finally taps some of its $3.3 bln cash pile
* Shares in RSA up 2 pct, PZU up nearly 3 pct
By Simon Jessop and Adrian Krajewski
LONDON/WARSAW, April 17 Troubled UK insurer RSA
has sold the bulk of its eastern European operations to
Poland's state-controlled group PZU for some 360
million euros ($500 million), the Polish firm's biggest ever
deal and RSA's first to be done under its financial
Announcing the sale of three Baltic businesses and one
Polish operation on Thursday, RSA said more disposals could be
on the way during 2014, as it seeks to boost its capital base by
up to 1.6 billion pounds ($2.7 billion) after it was hit by a
series of weather-related claims and an accounting scandal at
its Irish unit.
For PZU, central and eastern Europe's largest insurer, the
deal taps just a fraction of its $3.3 billion cash pile, which
had stood largely intact after previous attempts to score a big
deal came to nothing.
Shares in RSA were up 2.1 percent at 94.6 pence by 1133 GMT
when PZU was up 2.6 percent at 425.25 zlotys and the STOXX
Europe 600 Insurance Index was up 0.5 percent.
"I think it's a very positive disposal. They've achieved a
higher level of proceeds than I think the market was expecting,"
said Tom Dorner, analyst at Citi.
Atif Latif, director of trading at Guardian Stockbrokers,
also said the deal was good for RSA, valuing the units at above
market estimates of 16 times 2013 pre-tax profit and 1.2 times
RSA's new chief executive Stephen Hester said in a statement
that the disposals were in line with its stated aim of focusing
on core businesses in the UK & Ireland, Scandinavia, Canada and
"The total sale proceeds represent significant progress
against our overall target of at least 300 million pounds of
disposal proceeds set for 2014... We will continue to evaluate
further non-core disposals, some of which we expect to occur
during 2014," he added.
The deals with PZU will see the Polish firm take control of
Lithuania's biggest insurer, Lietuvos Draudimas, Latvian rival
AAS Balta, an Estonian unit of RSA's Danish insurer Codan
Forsikring and Polish Link4.
Once all the sales are completed around 200 million pounds
will be added to RSA's tangible assets and will leave its
central and eastern European unit with just a small business in
The Polish insurer, worth almost 12 billion zlotys on the
Warsaw bourse, said the deal strengthened its regional lead over
Austria's Vienna Insurance Group and Italy's Generali
, and would not deplete its capacity for paying
dividends or funding further takeovers.
(Additional reporting by Tricia Wright and Jemima Kelly in
London and Marcin Goettig in Warsaw; Editing by Greg Mahlich)