US billionaire Warren Buffett is interested in buying Royal Bank of Scotland’s insurance business Direct Line, a report said Sunday.
Spiraling claims from car accidents have led to heavy losses at RBS’s insurance arm and the bank has brought in a team of advisors to help sell the business, according to the Sunday Times.
RBS, which is 83-percent state-owned after being bailed out by the British government, has been ordered by the European Commission to sell Direct Line to fall into line with competition rules.
Berkshire Hathaway, the investment vehicle owned by Buffett, is among a clutch of potential bidders interested in the business, the Sunday Times reported. US insurer Allstate has also expressed an interest, it was claimed.
RBS would not comment on speculation over potential buyers, but did confirm it had engaged a team of advisers to see through the sale.
Direct Line was being lined up for a stock market flotation, but the significant losses made by the business are thought to have derailed the plan.
London, Aug 29, 2010 (AFP)