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News Report Says Berkshire, Allstate Expressed Interest in RBS Insurance Unit

Source: MarketWatch

Posted on 30 Aug 2010

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The Sunday Times without naming sources reported that Warren Buffett's investment vehicle Berkshire Hathaway Inc. and Allstate Corp. have expressed interest in buying Royal Bank of Scotland Group PLC's (RBS) insurance business Direct Line among others.

Spiraling claims from car accidents have led to heavy losses at the insurance arm, which also owns the Churchill brand. Although the business was being lined up for a stock-market flotation, the poor financial performance is thought to have derailed those plans, according to the report.

RBS last week launched a beauty parade for advisers that will handle the sale.

An RBS spokesman declined to comment on the report, but noted the company has until December 2013 to sell its insurance operations as ordered by the European Commission after receiving aid from the U.K. government during the credit crunch.