- The combined entity will have a balance sheet of £89 billion as of December 31.
- Coventry Building Society operates as a mutual organization owned by its members.
UK’s Coventry Building Society has acquired Co-operative Bank for £780 million ($990 million) in cash, Reuters reported. This merger, expected to finalize in the first quarter of 2025, promises to create a formidable entity in the financial sector.
Coventry Building Society’s acquisition of Co-op Bank marks one of the latest efforts among UK lenders to expand their market share. The combined entity will have a balance sheet of £89 billion as of December 31. The transaction will include up to £125 million of deferred payment, contingent on Co-op Bank’s future performance and the terms of the share purchase agreement.
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Non-Binding Offers And Co-operative Bank
Last year, Co-op Bank, known for lending to consumers and small and medium-sized businesses, entered into negotiation with Coventry after receiving several non-binding offers from other potential bidders. The acquisition will be funded entirely through Coventry’s existing cash reserves, and Co-op Bank is set to pay a dividend within the current financial year.
Coventry Building Society operates as a mutual organization, meaning it is owned by its members rather than shareholders. This structure often provides members with unique benefits and ownership rights. Despite the significant nature of the acquisition, Coventry’s Chairman, David Thorburn, emphasized that the deal aims to create a stronger mutual business that serves the best interests of both current and future members.
Interestingly, Coventry announced that its members would not be voting on the merger, a decision paralleling a similar move by Nationwide during its recent acquisition of Virgin Money UK. The merger is subject to regulatory approval.
The merger of Coventry Building Society and Co-op Bank represents a strategic alignment designed to bolster both institutions in a competitive market. With the deal expected to be completed in early 2025, the combined entity is poised to enhance its market presence and deliver greater value to its members.
