(Bloomberg) -- Zurich Insurance Group AG has arranged 5.5billion pounds ($8.4 billion) in financing for the takeover ofsmaller rival RSA Insurance Group Plc, according to peoplewith knowledge of the plan, signaling the Swiss insurer is gettingcloser to proceeding with a formal offer.

Zurich has arranged the loans through Morgan Stanley, CitigroupInc., HSBC Holdings Plc, Deutsche Bank AG, UBS Group AG and LloydsBanking Group Plc, the people said, asking not to be identified asthe information is private. The company is still doing a duediligence process before making a formal offer for RSA, they said.The financing is a bridge facility, meaning Zurich would need torepay it probably by selling securities if the bid goes ahead,according to the people.

Zurich last month made a takeover proposal that would value RSAat about 5.6 billion pounds. That would make it the biggestacquisition in the industry in Europe this year. RSA is stilltrading below Zurich’s tentative offer of 550 pence a share,signaling investors may be concerned about the deal closing at thatprice.

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