Royal London confirmed this morning that it was in “exploratory” takeover talks with rival mutual LV=.

In a statement Royal London said: “We note LV=’s announcement and we can confirm we have had initial, exploratory discussions with them. There is no certainty that these discussions will result in a transaction and a further announcement will be made as and when appropriate.”

LV= announced today its new interim chair will be Seamus Creedon who will take over as interim chair from Alan Cook. Mr Cook decided to step down after the £530m failed bid by private equity firm Bain Capital to buy LV= last year. LV= members did not support the deal in sufficient numbers. 

Mr Creedon said today: “We share a common interest with Royal London in a healthy and vibrant mutual sector so that we can both compete fairly with shareholder-owned firms. We have had, and continue to have, discussions with Royal London about if and how we can co-operate to the benefit of both sets of members and the mutual sector. In the meantime, we will continue to strengthen our independent business for the benefit of our existing and future policyholders.”

Royal London expressed interest in acquiring or merging with Royal London after a private equity-funded deal by Bain Capital to buy LV= failed last year.

Royal London said it could offer “an attractive future for the members of LV= as part of a growing and well-capitalised mutual.”

Royal London has previously offered exclusive talks with fellow mutual LV= about a possible merger after the bid by US private equity firm Bain Capital for LV= collapsed. LV= has previously rebuffed Royal London's approaches in the past.

While the Bain bid was on the table, LV= rejected the initial Royal London approach saying Royal London’s proposal would have resulted in the "rationalisation" of operations and significant job cuts with no commitment to retain LV='s office locations in Exeter and Hitchin. 

The deal with Bain Capital failed to achieve enough support from LV= members. Bain needed to win 75% of voting members to seal the deal but only achieved 69%. The vote sent LV= back to the drawing board.

Royal London was believed to initially be one of 12 potential bidders for LV= which says it needs new investment to strengthen its balance sheet and fund growth. Any merger is likely to require all voting members of both mutuals to approve the deal. 

LV chairman Alan Cook announced he would quit after the Bain Capital vote failed. 

• This is a developing story. Please check back later for updates.