Clifford Chance and Allen & Overy have advised Liverpool Victoria Friendly Society and Allianz respectively on their joint venture, creating a general insurance business with over 6 million customers. The new LV= branded joint venture will be the UK’s third largest personal insurer with over £1.7 billion annual premium income.
The first stage of the transaction is expected to close during the second half of 2017. LV= will receive £500 million from Allianz in exchange for a 49% stake in LV=’s General Insurance businesses (LV= GI). The new, long-term joint venture will acquire Allianz’s personal home and motor insurer’s renewal rights while Allianz will obtain LV= GI’s commercial insurer’s renewal rights. The second stage of the transaction will take place in 2019 and will see Allianz pay £213 million for a further 20.9% stake in LV= GI through an agreed, forward purchase based on a total valuation of £1.020 billion for 100 percent of LV= GI.
The transaction allows Allianz and LV= to take a leading role in the growing UK retail sector by creating a strong and customer-centric insurer in the personal home and motor insurance markets. While the joint venture offers Allianz the opportunity to partner with a trusted brand offering excellent customer service, it provides LV=, the UK’s most trusted and most recommended insurer, the financial strength and expertise to further grow in general insurance and develop in its core Life & Pensions market.
Ashley Prebble, lead partner on the deal said, “It’s been a pleasure to work once again with our longstanding client LV= on this major deal. The long term nature of the joint venture and support from one of the world’s largest insurers will allow LV= to build on their highly successful brand and continue to grow their general insurance business.”
Insurance partner Ashley Prebble led the Clifford Chance team, with support from partners Jonathan Kewley, Katherine Coates, Hilary Evenett, Mike Crossan and Nelson Jung.
The A&O team was led by Corporate partner Hans Diekmann in Dusseldorf, with Corporate partner Philip Jarvis in London and senior associate Claire Coppel.
(Sources: Clifford Chance / A&O)