Nationwide Building Society and Legal & General have entered into a distribution deal that will mean Nationwide selling L&G’s life, investment and pension products.
As part of the deal, L&G is buying Nationwide subsidiaries Nationwide Life and Nationwide Unit Trust Managers.
The current value of the two subsidiaries is 285m after the extraction of 70m of capital by Nationwide in December 2006 but communications and commercial director Stuart Bernau says the final figure will be nearer to 390m when the deal completes this summer.
Bernau says the building society came to the decision to sell off the two subsidiaries after a strategic review of its businesses because it wants to focus its resources on distributing products to customers rather than on manufacturing products.
Nationwide will sell L&G products through the society’s 2,000 team of advisers and the distribution arrangement is expected to be launched on completion of the sale.
It is assuring customers with existing life insurance, investment or pension policies that they will see no change in the short term but over time some plans may be moved to L&G’s life, portfolio management and unit trust companies. The 270 staff working in the Nationwide Life and Nationwide Unit Trust Managers businesses will be taken on by L&G and will continue to work from offices in Swindon.
Bernau says: “We had a beauty parade with three companies but Legal & General was the best fit in many ways in terms of product range, technology systems, people and culture.”
Legal & General group chief executive Tim Breedon says: “It clearly supports our corporate strategy to provide access to our extensive range of value for money products and services to consumers in the UK, through the broadest possible range of distribution channels.”