BAT investors take smaller stake in giant

BAT shareholders will have only 43 per cent of Zurich Financial Services group (ZFS) the pounds 22bn financial services giant to be formed by merging BAT's financial services businesses Eagle Star and Allied Dunbar, Threadneedle Asset Management and Farmers, the US-based insurer with Swiss- based Zurich Insurance, not the 45 per cent stated when the merger was first announced in October. The adjustment reflects the improvement in Zurich's anticipated earnings since that date, a joint statement from the two companies said yesterday.

"We believe these definitive terms offer excellent value for shareholders," BAT Industries chairman, Lord Cairns said. Other details including the arrangements for joint control remain the same. The deal is subject to regulatory consent and shareholder approval and is not likely to become final until the second half of 1998. but the terms are now binding and will not be subject to further adjustment. ZFS will be one of the largest insurance and asset management groups in the world with gross premium income of $40bn, assets under management of $342bn and 68,000 employees.

BAT shares fell 7.5p to 533.5p yesterday.