Britain’s Coventry Building Society will buy Co-operative Bank for 780 million pounds ($989.9 million) in cash, the two companies said in a joint statement on Friday.
The latest attempted tie-up among UK lenders jostling for market share is expected to complete in the first quarter of 2025, the statement said.
The deal would create a group with a pro-forma balance sheet of 89 billion pounds as of Dec. 31, the companies said.
Up to 125 million pounds of the cash consideration will be deferred for three years from completion, subject to the future performance of Co-op Bank and the terms of the share purchase agreement, they added.
Co-op Bank, which lends to consumers and small and medium-sized businesses, said late last year that it was in exclusive talks with Coventry about a possible merger after a number of non-binding offers from potential bidders.
The deal will be funded by Coventry’s existing cash reserves, with Co-op Bank set to pay a dividend in the current financial year, the statement said.
Building societies such as Coventry are mutually owned by members rather than shareholders, with members typically receiving different benefits and ownership rights than stockholders.
Coventry Building Society Chairman David Thorburn said the companies were “creating a stronger mutual business that will deliver in the best interests of current and future members”.
On Thursday the society said its members would not be invited to vote on the tie-up, which is subject to regulatory approval, echoing a decision by larger rival Nationwide on another recent deal to buy Virgin Money UK.
