Royal London merger talks with LV collapse

Merger talks between the mutual insurer LV and Royal London have broken down, the companies said on Wednesday.

Royal London chief executive Barry O’Dwyer said his firm’s 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”.

“For Royal London’s customers and members, nothing changes,” he added.

It is the second time within two months that a deal to buy the 178-year-old firm, originally known as Liverpool Victoria, has collapsed.

LV members blocked a board-recommended takeover by the US private equity outfit Bain Capital in December, which would have seen them receive a paltry £100 each.

Talks with Royal London began last month and were still continuing this week until LV said it had “become clear to LV that our different mutual models mean such a merger would not be in the best interests of LV members”.

Seamus Creedon, LV’s interim chair, said: “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.”

The company said it had a strong capital position, was trading well and would update its members on its business strategy “shortly”.

LV’s announcement came days after a boardroom clear out, after the failure of the Bain deal, with chairman Alan Cook – who had come in for heavy criticism over the demutualisation plan – stepping down, replaced on an interim basis by Creedon. Chief executive Mark Hartigan remains in place.