Royal London and LV= confirm merger talks
The mutual today confirmed it has had “initial, exploratory discussions with LV=” where it envisaged that LV= members would be given the option to become members of Royal London and “have their life savings protected and invested by a mutual”.
A statement read: “If the merger goes ahead, the bringing together of the best of both companies will result in a growing, well-capitalised, modern mutual. It will provide a great customer-owned alternative to the rest of the insurance and long-term savings market, which is almost universally shareholder-owned.”
It comes as LV= announced changes to its board of directors with Seamus Creedon due to take over as interim chair from Alan Cook.
The move is subject to regulatory approval but is expected to take effect from 1 April 2022.
Creedon said: “We share a common interest with Royal London in a healthy and vibrant mutual sector so that we can both compete fairly with shareholder-owned firms.
“We have had, and continue to have, discussions with Royal London about if and how we can co-operate to the benefit of both sets of members and the mutual sector.
“In the meantime, we will continue to strengthen our independent business for the benefit of our existing and future policyholders.”
The merger talks come after 179-year old mutual LV= which has over one million members, revealed it needed to seek investment to remain competitive and to grow over the long-term. It held a special general meeting in December 2021 where a takeover bid by private equity firm Bain Capital was rejected.
At the same time, LV= revealed it received an unsolicited preliminary merger proposal from Royal London which was on a substantively different structure to the offer received during the process in 2020, and “now includes the possibility of continued mutuality”.
The mutuals said there is no certainty these discussions will result in a transaction and a further announcement will be made in due course.
However, they added there’s currently no change for customers and customers do not need to do anything. If discussions are successful, Royal London said it will write to members to explain the proposals.
For LV= members, they should continue to contact LV= in the normal way as Royal London doesn’t have access to any information.