Discussions about the potential merger of Royal London and LV= have ceased. The pair of insurers released statements this morning confirming the decisions to move on individually.
Royal London said its offer to preserve LV=‘s mutuality through a merger was based on an understanding that LV= did not have a viable future as an independent company.
However, LV= said it had become clear that the two firm’s mutual models meant the merger would not be in the best interests of its members.
Earlier this week, the two providers confirmed exploratory talks over a possible merger had taken place following the rejection of LV=’s proposed takeover by Bain Capital by members in December.
LV= also announced Seamus Creedon would taking over as interim chairman from Alan Cook, who announced his departure after the Bain Capital deal collapsed, while a number of board members will also be stepping down.
LV= was offering members £100 cash and increases to with-profits policy payouts if they approved the deal.
In today’s statement, Creedon thanked Royal London for its engagement, adding the firm looked 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,” he said.
“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.”
Barry O’Dwyer, group chief executive of Royal London, said for its customers and members, nothing would change.
O’Dwyer added. “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.”