Mutual insurers LV= and Royal London end merger talks

Mutual insurers LV= and Royal London have walked away from talks over a possible merger.

LV=, formerly known as Liverpool Victoria, said a marriage would not be in the best interests of its members.

Royal London hinted that it had been misled into thinking that LV= did not have a viable future on its own.

It is the latest in a tumultuous few months for LV=, after its 1.2 million members rejected a takeover by US private equity firm, Bain Capital.

Mutuals are owned by, and for, their members. There was considerable public and political debate when the leadership at LV= favoured the Bain Capital takeover - a move that would have led to it losing its mutual status 178 years after it was founded.

In December, it was announced that after a vote, the sale did not get enough support from members.

Discussions about a merger with another mutual insurer - Royal London - began shortly afterwards, but on Wednesday both sides said these had come to an end.

LV= said a deal would not be possible because "our different mutual models mean such a merger would not be in the best interests of LV= members."

The company added it was in a healthy financial position, having previously stated that without a deal with Bain Capital it would struggle to survive.

Seamus Creedon, LV= interim chair, 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."

After these latest talks ended, Royal London's chief executive Barry O'Dwyer said: "Mutuals are owned by their customers and are run for their benefit.

"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."

LV=, originally founded to cover the funeral costs of Liverpool's poor, attracted a number of bids when it had first proposed a sale of the business, including from Royal London.

On Monday, it announced that its chairman Alan Cook was standing down, as part of wider boardroom reshuffle.