German insurance giant Allianz will purchase a majority stake in LV=’s general insurance arm for £713m subject to regulatory approval.
The pair will establish a joint venture under the LV= brand name, which will make it the UK’s third largest personal insurer with over £1.7bn annual premium income.
Initially Allianz will purchase a 49% stake in the Bournemouth-based insurer’s GI arm for £500m.
Then through an agreed forward purchase it will acquire a further 20.9% in 2019 for £213m – bringing its total stake to 69.9%.
Oliver Bäte, chief executive of Allianz Group, said: “I am thrilled to join forces with LV=, one of UK’s most respected and loved brands.
“This partnership will first and foremost benefit our customers who will have access to an expanded range of products backed by the financial strength of Allianz. We value LV=’s strong brand and market positioning.”
The deal is designed to give Allianz a greater presence in the UK personal insurance market. It currently focuses on commercial insurance in Britain.
Richard Rowney, chief executive of LV=, said: “I am delighted to announce this joint venture with Allianz, which will see us create the third largest personal insurance business in the UK.
“With this deal, LV= has a positive future in both general insurance and life and pensions.
“The strategic partnership with Allianz will allow us to continue to benefit from a growing personal insurance business while also enabling us to strengthen our capital position, leaving us well placed to continue to expand our life and pensions business and pursue new digital opportunities.”