Britannia, the UK’s second largest building society is to merge with Co-operative Financial Services (CFS) in a partnership that will create one of the largest financial groups in the country.
The combined business will have 9 million customers, more than 12,000 employees and 300 branches. There will be no compulsory redundancies made even though there are expected to be branch closures, particularly if several are positioned closely together.
Customers will not experience any immediate change and the new business will continue to trade under the Britannia and Co-operative brands until a single brand name is created. Once merged, the business will become a wholly owned subsidiary of the Co-operative Group. All Britannia members will become members of the Co-Operative Group
The deal will only be possible if new legislation allowing mergers between co-operatives and mutuals is passed in March. The Building Societies (Funding) and Mutual Societies (Transfers) Act will give building societies greater freedom to merge with other companies and will also change current restrictions on how they can raise money.
Britannia members will also be invited to take part in a vote on the merger in April. If successful it will take an estimated three years to integrate the businesses.
The combined business will be led by the current Britannia chief executive, Neville Richardson, with the current CFS non-executive chairman Bob Burlton adopting the same position on the merged group. CFS Chief Financial Officer Barry Tootell will become the Chief Financial Officer.
Both companies claim to be financially strong, with a combined profit of £267m in 2007.