Life Assurance Partnership Agreed with CGU
Royal Bank of Scotland Group PLC
29 November 1999
The Royal Bank of Scotland Group plc and CGU plc
agree new life assurance partnership
The Royal Bank of Scotland Group plc ('RBS') and CGU plc ('CGU') have agreed
to enter into a strategic partnership to provide long term life assurance,
pensions and investment products to RBS's customers.
They have signed a Memorandum of Understanding setting out the principles
which will underpin their relationship. In particular, CGU have agreed to
acquire a 50% shareholding in RBS's life assurance subsidiary, Royal Scottish
Assurance ('RSA'), for consideration in the region of £150 million. CGU will
replace Scottish Widows in this venture and will provide administration and
asset management services to RSA.
CGU also intends to increase its holdings in RBS shares by up to £300 million
to cement this new relationship. The purchases will be made over the next six
months at CGU's discretion using its own valuation criteria, and they are not
governed by any timetable.
The two companies will explore opportunities to develop further ventures in
the financial services sector generally.
Commenting on the announcement, Sir George Mathewson, Group Chief Executive of
RBS, said 'We are delighted to be forging a strategic partnership with a
company of the standing and reputation of CGU. Our customers will benefit
from the knowledge and expertise of CGU in the life and pensions market and
their proven track record of low cost administration. This will enable us to
focus on delivering outstanding value to customers, and, in doing so, create
value for our shareholders.'
Bob Scott, Group Executive of CGU added: 'We are delighted to join with RBS in
this partnership. It gives CGU a substantial opportunity to improve the
products and services available to RBS's customers and the potential to
further reduce our unit costs for the benefit of all customers and
shareholders.'
Enquiries:
RBS
Mr Benny Higgins, Managing Director, Retail Banking 0131 523 0644
CGU
Mr Philip Twyman, Group Executive Director 0171 662 2679
This announcement should be read in conjunction with the full announcement of
the offer for National Westminster Bank Plc by RBS, which is being released
today on 29 November 1999. That announcement is not for release, publication
or distribution in or into Australia, Canada, Japan or the United States.
The contents of this announcement have been approved by Merrill Lynch and
Goldman Sachs solely for the purposes of section 57 of the Financial Services
Act 1986.
Merrill Lynch International and Goldman Sachs International, which are
regulated in the UK by The Securities and Futures Authority Limited, are
acting for RBS and no one else in connection with RBS's offer for National
Westminster Bank plc ('the Offer') and will not be responsible to anyone other
than RBS for providing the protections afforded to customers of Merrill Lynch
International and Goldman Sachs International nor for giving advice in
relation to the Offer.
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