Mon, 28 Sep 2020 | BUSINESS NEWS
Mutually-owned life insurer LV= has confirmed that it is in talks with several parties regarding a potential takeover. The group, which is the UK’s third largest mutual insurance business, sold its general insurance business to Allianz last year and launched a strategic review in June, saying that it would consider a sale of its life insurance and pension businesses.
The sale could potentially be worth more than £500 million, with reported suitors said to include the UK’s largest mutual insurer Royal London, private equity firm Bain Capital, buyout firm Cinven and listed insurer Phoenix Group Holdings. Any deal could see LV=’s 1.1 million members receive a windfall payment.
An acquisition by Royal London would create a mutual insurance firm with close to 10 million UK customers. Royal London has £139 billion in assets under management and earlier this year agreed a deal to acquire police and armed forces insurer Police Mutual. According to sources close to negotiations, Royal London would use the proceeds of a £600 million debt-raising it undertook in 2019 to finance the purchase.
In a statement to the London Stock Exchange, LV= said: "LV=notes the recent press speculation and confirms that as part of a previously announced strategic review it has been and remains in discussions with a number of parties regarding a potential transaction.”
"Discussions are on-going and there can be no certainty that the discussions will result in any transaction being agreed or with whom. LV= continues to trade well having adapted effectively to the impact of COVID-19 with a strong capital coverage ratio in excess of 200 per cent. A further announcement will be made if and when appropriate."
LV= registered pre-tax profits of £15 million in 2019, from a total income of £1.8 billion. It manages assets worth £14 billion, having become a substantially slimmed-down business after concluding the sale of its general insurance business to Allianz.
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