Scottish Life Turns Down GE Bid

September 18, 2000

In a surprise move Friday, Scottish Life and GE Capital broke off their acquisition discussions apparently in disagreement over the price GE was offering to acquire one of Scotland’s last independent mutual life and pension insurers.

Reports last week had indicated that GE was offering up to £2 billion ($2.8 billion); however, GE put only £1 billion ($1.4 billion) on the table, which was unacceptable to Scottish Life. The Financial Times said the offer just exceeded its “embedded value of £800 million” ($1.12 billion).

Newspaper reports said both sides blamed the other for failing to clinch a deal, but Scottish Life apparently felt that it would receive a higher offer, notably from two English mutual insurers, Royal London and Liverpool Victoria.

GE Capital is still interested in European expansion. “We are committed to growth in the European insurance sector and are closely monitoring activity because we can provide capital to support financially challenged mutuals,” Clive Cowrey, chief executive of GE Insurance Holdings, the European arm of GE Capital, told Reuters News Agency.

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