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Last Updated: Thursday, 26 January 2006, 20:15 GMT
Old Mutual seals deal for Skandia
Skandia building
Skandia is Sweden's oldest listed company
South African insurance firm Old Mutual has finally closed its multi-billion dollar deal for Swedish rival Skandia.

The London-listed insurer declared its $6.5bn (3.6bn) offer for the firm unconditional, after extending its offer period three times.

The move obliges investors holding 72.3% of Skandia who have agreed to the deal to sell their stock to Old Mutual, giving it effective control of Skandia.

Skandia's board had rebuffed a bid from Old Mutual saying it was too low.

Despite bringing its six-month battle for control of Skandia to an end, Old Mutual's shareholding falls just short of the 75% share it had hoped to pick up.

New markets

Hitting that milestone would have allowed the firm to claim millions of pounds a year in tax breaks in the UK.

However, the group can continue to buy Skandia shares on the open market, and if it manages to accrue 90% of the firm it could force remaining investors to sell their shares and delist Skandia from the Stockholm Stock Exchange.

The takeover will allow Old Mutual to diversify away from the South African market where it earns most of its money, as well as boosting its presence in the UK where Skandia is increasing its presence.

Meanwhile, Skandia has said it will hold an extraordinary general meeting on 21 February to elect a new board.

The development is likely to see board members who opposed the deal - such as chairman Lennart Jeansson - ousted from their positions.

However, remaining shareholders who are opposed to the deal could also use the meeting to push for seats on the board.




SEE ALSO:
Old Mutual extends Skandia offer
14 Nov 05 |  Business
Skandia rejects Old Mutual offer
23 Sep 05 |  Business
Old Mutual launches Skandia bid
02 Sep 05 |  Business
Old Mutual benefits from Nedbank
10 Aug 05 |  Business
Second Skandia boss is arrested
06 Feb 04 |  Business
Boss of scandal-hit Skandia quits
01 Dec 03 |  Business


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