Legal & General has announced it is to buy Nationwide’s subsidiaries Nationwide Life and Nationwide Unit trust managers in a £285m deal.
As part of the deal, Nationwide Building Society and Legal & General have today announced that they have entered a joint distribution agreement for the supply of life insurance, investment and pension products.
The current value of the two companies is £285m after the extraction of £70m of capital by Nationwide in December 2006.
Nationwide will sell Legal & General products via the building society’s 2,000 team of advisers and consultants.
The sale is due to complete in the summer of 2007 and this is when the distribution arrangements are expected to be launched.
Customers with existing life insurance, investment or pension policies will see no change in the short term but over time some of their plans may be migrated to L&G’s life, portfolio management and unit trust companies.
The 270 employees working in the Nationwide Life and Nationwide Unit Trust Managers’ businesses will be taken on by L&G and will continue to work from their current offices in Swindon.
Nationwide chief executive designate Graham Beale says: “We have been very successful over the past ten years in supplying our own life insurance and investment products. However, by entering into a distribution agreement with Legal & General we are joining forces with one of the strongest players in the sector.
“This arrangement will provide an excellent opportunity for our customers to choose from a broader range of competitively priced products and enjoy an enhanced service. For example, we are planning to introduce an ethical investment fund and family life insurance policies. In addition our customers will have the confidence of dealing with two of the strongest retail financial services names in the UK.”
Legal & General group chief executive Tim Breedon says: “This strategic
alliance with Nationwide builds further on our current position as a leading
partner provider of life, pensions and investment products distributed through the UK’s network of High Street Banks and Building Societies. 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.”