Insurance giants LV= and Royal London will not be merging despite confirming, just two days ago, they had entered into ‘explanatory discussions’.
The saga has already seen private equity firm Bain Capital bid accepted by LV=, only for the deal to be rejected by the insurers’ members.
LV= said the firms’ differing “mutual models” meant a merger “would not be in the best interest of its members”, which ended talks about a potential deal.
Seamus Creedon, LV= interim chair, said: “We thank Royal London for its engagement, and we look forward to operating alongside it as part of a vibrant mutual sector. 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.”
Preserve mutuality
Barry O’Dwyer, group chief executive of Royal London, added: “Mutuals are owned by their customers and are run for their benefit.
“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.”
