NatWest Confirms $10.75 Billion Takeover Offer for Legal & General

Strategic Insights -

NatWest Bank today confirmed that its $10.75 billion takeover offer for Legal & General has been accepted by the insurance group's board. The move creates a combined group worth $30 billion, making it the UK's third-largest life assurance company, employing 76,000. This acquisition accelerates consolidation in the industry, which is facing growing pressure from government plans for low-fee stakeholder pensions.

Key Takeaways:

  • The takeover is valued at $10.75 billion, with L&G shareholders receiving 210p per share, comprising 85p in cash and the remainder in new NatWest shares.
  • The offer is flexible, allowing L&G shareholders to choose between cash or NatWest shares.
  • After the deal, NatWest's shareholders will hold around 75% of the company, while L&G's shareholders will own the remaining 25%.
  • Annual cost savings of at least $130 million before tax are expected by the end of 2002.
  • The takeover gives NatWest access to a range of financial services products, including life assurance and pension policies, which will be sold through its 2000-strong branch network to its 6.5 million personal account holders.
  • The Manufacturing Science and Finance Union, which represents L&G staff, has been assured that there will be no job losses on the L&G side, but the deal may impact job prospects at NatWest's life assurance business.
  • The takeover is seen as a strategic move by NatWest, with Sir David Rowland stating that L&G is a group with "strong management, a great record and excellent prospects."

Statistics:

  • $10.75 billion: the value of NatWest's takeover offer for Legal & General
  • 210p: the price per share that L&G shareholders will receive, comprising 85p in cash and the remainder in new NatWest shares
  • $30 billion: the combined value of the merged group
  • 76,000: the number of employees in the combined group
  • $130 million: the expected annual cost savings by the end of 2002
  • 2000: the number of branches in NatWest's network
  • 6.5 million: the number of personal account holders with NatWest

Sources:

  • [Financial Times, 2000: NatWest to buy Legal & General](https://www.ft.com/content/f009209e-eb57-48e5-a7b4-5fc3dd11d440)
  • [BBC News, 2000: NatWest buys Legal & General](https://news.bbc.co.uk/1/hi/business/704637.stm)
  • [The Guardian, 2000: NatWest's $10.75bn bid for Legal & General](https://www.theguardian.com/business/2000/jun/23/lloyds)