Allianz in 'advanced talks' to buy L&G's home insurance business: report

German insurer Allianz is in "advanced talks" to buy UK life and general insurance provider Legal & General’s (L&G's) home insurance business, Sky News reported on April 29.

According to the report, the deal is likely to be valued at between £250 million and £350 million.

The L&G division, which provides home and pet insurance, was put up for sale last year.

The report said that Direct Line Group had earlier indicated its interest in acquiring the business, but Allianz has come out as a frontrunner to finalise the deal.

The potential acquisition positions Allianz to expand its geographic presence and enter new lines of business.

Commenting on the possibility of Allianz making a move for L&G’s insurance unit, Andrew Holderness, global head of corporate insurance team at Clyde & Co, said: "The suggested acquisition Legal & General’s general insurance arm by Allianz provides evidence of three on-going M&A trends.

"First, the search for scale continues with larger market players actively on the look-out for targets to extend geographic footprint, expand into new lines of business and reach new customers, with the additional benefit of generating significant cost synergies.

"Second, after a number of years of difficult trading, we expect the need to dispose of non-core assets to persist.

"And third, the UK remains an active market for M&A – it was the third busiest last year behind the US and Japan.

Holderness added: "However, Brexit remains the fly in the ointment for the UK. It is likely to generate uncertainty – the enemy of deal-making – at least until the ‘flextension’ deadline in October and most likely beyond, resulting in a slowdown in M&A."

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