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Liverpool Victoria to buy Frizzell

Nic Cicutti
Wednesday 07 February 1996 19:02 EST
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NIC CICUTTI

Marsh McLennan, the US insurance broker and investment manager, is to sell Frizzell, the Bournemouth-based financial services company, to Liverpool Victoria Friendly Society for pounds 188m.

The deal, which is subject to approval by City financial regulators, is expected to be completed by the end of June.

Frizzell was set up as a family business in 1923, specialising in general insurance broking. In the past five years it has expanded into a number of areas, including banking and independent financial advice.

The company, which brokers household and motor cover for about 600,000 policyholders, also targets specialist affinity groups, especially white- collar trade unions.

In November 1992, the Frizzell family sold the entire group to Marsh McLennan for about pounds 107m.

AJC Smith, chairman of Marsh McLennan, which employs about 25,000 employees in about 80 countries, said yesterday: "We have been delighted with our investment in Frizzell, but we believe [the company] is now a better strategic fit with Liverpool Victoria, which can bring a critical mass to Frizzell's consumer operations."

Liverpool Victoria, founded in 1843, is the largest friendly society in the UK, with a 1,500-strong sales force and more than one million clients. It manages pounds 3.5bn of investors' funds.

The society, which specialises in traditional insurance, pensions and savings policies, has recently experimented with niche marketing in a number of new areas, including women.

Analysts had long expected an acquisition by Liverpool Victoria, which has a significant cash pile and has indicated that it is prepared to grow by takeover. But the takeover of Frizzell was seen as unexpected.

Roy Hurley, chief executive at Liverpool Victoria, based in London, said: "Frizzell and Liverpool Victoria are complementary businesses with similar customer values. As well as being a successful business in its own right, we anticipate a substantial 'marriage value' from the acquisition."

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