Relations between LV= and rival mutual Royal London have taken another dramatic turn with the companies confirming the collapse of merger talks.
LV= said the marriage would not be in the “best interests” of its members while Royal London suggested it was misled into thinking its rival did not have a viable future as an independent business. The collapse of talks comes days after the companies confirmed that discussions were going ahead amid a shakeup to leadership at LV=, which saw Chair Alan Cook step down.
Confirming that merger talks have ceased, Barry O’Dwyer, the chief executive of Royal London, 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.”
A rift between the fellow mutuals emerged amid the fall out from a failed £530m takeover bid for LV= by US private equity giant Bain Capital.
LV=’s former chair Cook accused Royal London of “disrupting” the deal which was voted down emphatically by the company’s own shareholders.
The 179-year-old insurer previously declined an offer by Royal London, arguing that a deal with Bain Capital offered greater assurances to protect the jobs of some 1,000 employees in the South West, even though Royal London offered £10m more than Bain.
Royal London revealed the generous terms of its offer, piling pressure on LV= to reject Bain’s bid by stoking the flames of a Daily Mail campaign, supported by politicians from across the political spectrum, which opposed the firm being snapped up by a US owner.
In a statement today, Seamus Creedon, LV= interim chair commented, “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,” he continued.