Buffett considers bid for RBS insurance companies

Click to follow
The Independent Online

Warren Buffett is considering mounting a multi-billion-pound bid for some of the most famous names in British insurance, including Direct Line and Churchill.

The billionaire investor said yesterday that he has been poring over the books at Royal Bank of Scotland, which has put its portfolio of insurance businesses up for sale after running into financial difficulties during the credit crisis.

Mr Buffett told reporters in Omaha that he was looking to buy whole businesses in Britain, although strict regulations and high taxes were putting him off investing in the UK stock market.

"We will look at the Royal Bank of Scotland's divestiture of its insurance business, and a Berkshire Hathaway subsidiary is close to buying another medium-sized UK company," he said. "The UK economy is something we understand and feel comfortable with."

Mr Buffett has previously declared small holdings in GlaxoSmithKline, Britain's biggest drug company, and in Tesco, but he slammed the UK's stamp duty on share purchases and rules that require any stake of more than 3 per cent to be declared within days. "The stock market in the UK is not as good as the US," he said.

Royal Bank of Scotland said last month that it may sell all or part of its insurance business and City analysts believe it could fetch from $6bn (£3bn) to $10bn. As well as Churchill and Direct Line, the company owns the Privilege car and home insurance brand.