Financial Services

Published: February 9, 2022 | Updated: February 10, 2022

LV= to remain an independent mutual after merger talks with Royal London are ended

LV= County Gates site in Bournemouth.
By Andrew Diprose, editor

The future of one of Dorset’s biggest private employers has taken a new turn.

LV= has confirmed that merger talks with Royal London have ended.

A statement from the company said: “LV= entered into merger discussions with Royal London at the start of the year.

“However, it has 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, talks between the two companies have now ceased.”

Seamus Creedon, Interim Chair, LV=, 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.”

The latest twist comes two months after plans by US private investment giant Bain Capital to acquire the mutual for just over a half a billion pounds failed after a vote by LV= members.

Instead the Board of the mutual life pensions and investments group decided to consider an unsolicited preliminary merger proposal from Royal London.

Our December 2021 story.

LV=, which has a base at County Gates in Bournemouth and employs several hundred people in Dorset, had previously declined an offer by Royal London in favour of Bain Capital.

Although 69 per cent of members who voted supported the special resolution to approve the acquisition of the LV= business by Bain Capital, the result was below the required 75 per cent threshold.

As a result the proposed transaction with Bain Capital was abandoned.

Just 15 per cent – 174,240 – of LV=’s 1.16 million members took part in the vote.

The Board of LV= expressed disappointment at the result which it argued was in the best interests of LV= and its members.

In a statement it promised to swiftly reassess its strategic options and explore alternative ways to provide the best long-term outcome for members, the business, employees and its wider communities.

LV= subsequently confirmed it had received an approach from Royal London.