It was back in March that we revealed that
LV= was on the hunt for a merger partner – and now the name of one of its possible future partners has been revealed.
The name in question is that of insurance giant,
Allianz – with Sky News reporting that the two are in talks and that the German firm may take a minority stake in the mutual’s general insurance operations.
Discussions are said to be at an early stage – but given that the friendly society boasts close to six million customers in the UK, the figures being touted are high. Potentially they could place a value on the general insurance arm of LV=’s business well in excess of £1 billion. It has also been reported that there may be a reinsurance deal for LV=’s balance sheet on the table.
According to insiders, LV= has been approached by several parties over a possible deal – including wealth funds and pension funds. It was also reported that a possible mega merger with Royal London had been aborted.
A report at heart.co.uk noted that the mutual is currently the third largest car insurance provider in the UK and has set its sights on becoming a “challenger brand”. However, amid a host of regulatory reform, the Ogden rate decision and more, mutuals are widely seen as being at a disadvantage because they are not able to issue new shares in order to gain capital.
To this point, Allianz and LV= have both rejected to comment on the potential deal. We’ll bring you more on the story as it becomes available.
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