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Allianz agrees to create JV, long-term strategic partnership with LV=

Allianz Group agreed to establish a joint venture and a long-term strategic partnership with Liverpool Victoria Friendly Society Ltd., creating the third-largest personal insurer in the U.K., with gross premiums written in excess of £1.7 billion and more than 6 million customers.

Under the terms of the first stage of the agreement, Allianz will pay LV= £500 million for a 49% stake in the latter's general insurance business. The new long-term joint venture, known as LV= GI, will acquire Allianz's personal home and motor insurer's renewal rights, while the German insurer will obtain the renewal rights of LV= GI's commercial insurer.

The first stage of the deal is expected to be completed during the second half of 2017. The second stage of the transaction, which will take place in 2019, will see Allianz pay £213 million for an additional 20.9% stake in LV= GI, through an agreed, forward purchase, based on a total valuation of £1.02 billion for 100% of the joint venture.

The U.K.-based insurer also has a put option under which it can sell all or part of its remaining shares to Allianz.

The joint venture will be run by LV='s managing director of general insurance, Steve Treloar, who will report to a board of directors drawn from the U.K. and German insurers.

The transaction is subject to regulatory approvals.

Allianz's U.K. corporate structure includes Allianz Holdings Plc.