After the proposed takeover of LV= by Bain Capital fell through at the back end of last year after only 69% of those who voted gave their approval to the proposed £530 million deal – short of the 75% needed – a deal with Royal London appeared to be on the cards. Until now.
LV= has this morning issued an update on its discussions with its fellow insurance giant – noting that it had “become clear to LV= that our different mutual models mean such a merger would not be in the best interests of LV= members.” As a result, it stated, talks between the two companies have now ended – with the mutual set to retain its independent status.
“We thank Royal London for its engagement and we look forward to operating alongside it as part of a vibrant mutual sector,” said LV= interim chair Seamus Creedon. “The strength of LV=’s business performance over the past 18 months combined with its operational progress has strengthened the board’s belief in, and commitment to, the continuation of our status as an independent mutual.
“We have heard what our members have said about the importance of mutuality and the continuation of the LV= brand. We continue to maintain our strong capital position, are trading well and building a successful future for LV=, its members, employees and wider communities. We will shortly update our members on our business strategy and will continue to engage with them over the coming weeks and months.”
Meanwhile, in a separate Press statement, Barry O’Dwyer, group chief executive of Royal London, offered his verdict on why the deal had fallen through.
“Mutuals are owned by their customers and are run for their benefit,” he said.
“Our offer to preserve LV=’s mutuality through a merger with Royal London was based on an understanding that LV= did not have a viable future as an independent company.
“For Royal London’s customers and members, nothing changes. We remain committed to delivering great value products, backed up by market-leading customer service. We look forward to sharing a substantial level of profits with our eligible customers in April, as we normally do.”
Insurance Business will bring you more on this story as it becomes available.