Buffett considering bid for bank's insurance business

The world’s richest man Warren Buffett is considering bidding for Royal Bank of Scotland’s insurance business, it emerged today.

The so-called Sage of Omaha said his Berkshire Hathaway investment company would look at RBS’s insurance unit.

Speaking at the group’s annual shareholders meeting in Nebraska, which attracted 31,000 people, he said he was looking for European bid targets, and was close to buying a medium-sized British company.

He was quoted in the Independent newspaper as saying: “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. The UK economy is something we understand and feel comfortable with.”

The billionaire is understood to want to combine the RBS business with his Geico insurance group if he is successful in acquiring it.

Royal Bank of Scotland said it was considering selling its profitable insurance arm, which includes Churchill Insurance and Direct Line, last month.

The announcement came as the group launched a £12bn (€15.2bn) rights issue to help shore up its balance sheet.

It is thought the sale of the insurance arm could raise as much as £5bn (€6.3bn).

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