Clifford Chance and Linklaters have taken lead roles on an agreement that will see Lloyds Banking Group offload 632 of its branches to the Co-operative Group, a move that gives Co-op around 7 per cent of the UK current account market.
The deal will see the Co-op triple the size of its banking presence to nearly 1,000 branches, pushing its customer numbers up by an estimated 4.8 million.
Clifford Chance has been advising the Co-operative Group for a number of years, with corporate partners Hilary Evenett and Mark Poulton advising on the agreement, which is expected to be worth up to £750m, alongside M&A corporate partner André Duminy. The magic circle firm previously advised Co-op on its £9.5bn merger with fellow co-operative grocer United Co-operatives in 2007 (6 August 2007).
Lloyds was advised by longstanding adviser Linklaters, led by corporate partners Jeremy Parr and Matthew Bland alongside capital markets partner Carson Welsh. Parr and Bland have worked with Lloyds for many years, previously landing lead roles on Lloyds mammoth £22.5bn capital raising in 2009 (24 November 2009). Linklaters said it could not comment on the recent agreement.
The agreement, which was required under European state aid regulators after Lloyds was part-nationalised in 2009, will see Co-op pay £350m upfront with an additional payment of up to £400m based on performance. Lloyds is underwriting the initial consideration of £350m.
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