German insurance giant Allianz has confirmed it has struck a joint venture deal with British firm LV=, creating the UK’s third largest personal insurer.
Allianz will pay £500m to LV=, formerly known as Liverpool Victoria, in exchange for a 49pc stake in its general insurance (GI) business, with the deal expected to close in the second half of this year.
A second stage to the transaction will take place in 2019 seeing Allianz pay a further £213m for an additional 29pc stake in LV= GI.
LV= has a put option under which it can sell all or part of its remaining shares to Allianz. The deal values the business overall at £1.02bn.
The joint venture will incorporate Allianz’s personal home and motor insurer’s renewal rights and LV=’s commercial insurer’s renewal rights.
It will operate under the LV= brand name and boast more than £1.7bn in annual premium income.
Olvier Bäte, chief executive at Allianz, said: “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.”
Richard Rowney, chief executive at LV=, added: “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.”