Royal Londoners vote on £219m Co-op deal

VOTING among over 500,000 members of Royal London is under way on its £219 million deal to acquire parts of the  Co-operative Banking Group.

The mutual pensions giant unveiled plans in March to buy the Co-operative Insurance  Society (CIS) and Co-operative Asset Management (TCAM). At the time, the Manchester-based Co-op was struggling to raise funds to acquire 632 branches from Lloyds Banking Group although that deal failed last month.

Royal London is expected to pay the Co-op £39m up front, with the remaining £180m due from the CIS funds once they are transferred. The larger payment will be at “no cost” to Royal London.

The deal will see the mutual take on around 170 staff and increase its funds under management from between £50 billion to £70bn. Customer numbers will increase from four million to six million and the number of policies the company manages will increase from 6.8 million to 10.3 million.

The mutual will leapfrog  Resolution and Lloyds to become the UK’s fifth-largest with-profits fund manager.

The acquisition is Royal London’s largest since it absorbed Royal Liver in 2011. That deal led to 110 job losses as work was transferred from Liverpool to Cheshire. It said that it expects to create around £150m of “operating synergies” with the Co-op deal.

Both Royal London’s annual general meeting and the extraordinary meeting take place on 4 June. The deadline for member votes to be received online or in paper form is 2 June.

The meeting will be the last chaired by Tim Melville-Ross who is retiring and will be succeeded by Rupert Pennant-Rea, a former Bank of England deputy governor.