British mutual life and pensions company Royal London has entered into a binding agreement to acquire Co-operative Insurance Society (CIS), the life insurance business of the Co-operative Banking Group.
Additionally, the life and pension company will purchase Co-operative's asset management business, TCAM.
The deal is estimated at 219m, of which 180m will be payable on fulfilment of certain conditions, especially when assets of the same value within CIS become available to the acquirer.
The acquisition will increase Royal London's funds under management from nearly 50bn to almost 70bn, while its customer base will grow from 4 million to 6 million.
CIS and TCAM will be initially held as subsidiaries by the acquirer and the CIS Long Term Business Fund will be maintained, which is expected to be transferred into Royal London in future.
Following completion of the proposed transaction, the mutual life firm will deliver policy administration services, asset management services and governance under an agreed expenses arrangement with the CIS Fund.
As of 31 December 2012, Royal London had funds under management of 50bn and a workforce of 2,910 people.
