Royal London has been reported to be one of the parties interested in the takeover of LV=

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LV= confirms media speculation on ongoing talks for its takeover. (Credit: aymane jdidi from Pixabay)

British life insurance firm Liverpool Victoria Financial Services (LV=) has confirmed media speculation that it has been in talks with various parties regarding a potential deal.

The company said that talks are going on and there can be no assurance that the discussions will lead to any deal being agreed or with whom.

The insurer stated: “LV= continues to trade well having adapted effectively to the impact of COVID-19 with a strong capital coverage ratio in excess of 200%.

“A further announcement will be made if and when appropriate.”

Royal London has been reported to be one of the parties that has been in takeover talks with the insurer.

According to Sky News, the talks between Royal London and LV= are at a late stage and will lead to a merger of their pensions, life insurance, and asset management businesses with over 10 million customers.

FT Adviser, citing sources, reported that the newly created company through the merger will be valued over £500m. Royal London is expected to fund the transaction with the proceeds of a debt raise of £600m it had participated in 2019, said the sources.

LV= launched a strategic review for its remaining business in June

The ongoing talks for LV= with various parties are in line with an announcement made by it in June 2020 about undertaking a strategic review, which includes a possible transaction.

At that time, the insurer said that it was evaluating various strategic options following the sale of its general insurance business. The review is to make sure that the remaining business is continued to be run in the best interests of all its members, said the insurer.

LV= also said that some but not all of the strategic options could involve a deal with a third party.

The British firm completed the sale of its 51% stake in LV General Insurance Group (LV GIG) for £578m to German insurance firm Allianz Group.

Currently operating as LV= GI, the divested business, which is now part of Allianz, has launched a restructuring programme that will put nearly 600 jobs at risk.