Lee Bottomley,BBC News, West Midlands
Coventry Building Society has struck a £780 million deal to buy Co-operative Bank but will not give members voting rights.
The acquisition is subject to regulatory approval and is expected to close in early 2025.
Combined, these financial institutions have millions of customers and assets worth around £89 billion.
Both organizations will continue to operate under their current names and brands until the integration is complete, which is expected to take several years.
The deal means the Co-op bank will return to a mutual organisational structure and be owned by individual members, rather than shareholders or investors like most UK banks.
Co-op Bank was part of the Co-op Group more than 10 years ago but was split up after suffering serious financial difficulties.
The company was rescued by a US hedge fund and is now owned by a group of private equity investors.
“More customers”
Both brands will remain in the downtown area until they are integrated, but “changes will inevitably occur over time,” he said.
Ultimately, we hope that Co-op Bank customers will become members of the Coventry Society.
Coventry Building Society said it would benefit from increased customer numbers, mortgage and savings balances, a wider range of financial products including current accounts and an increased branch presence across the country.
The company said it “carefully considered” whether to give members the opportunity to vote on the acquisition but “ultimately determined” that this was not necessary.
“This decision was reached following information received by CBS (Coventry Building Society) Board from member surveys and focus groups, which clearly demonstrated that maintaining our value proposition and quality of service was a priority,” the company said.
Coventry Building Society chief executive Steve Hughes said the combination of the two organisations would “enable us to deliver more value to more people over the coming years”.
Co-op Bank chief executive Nick Slaipe said the transaction was “a natural next step and presents an exciting opportunity”.
Coventry Building Society manages mortgages worth around £50 billion and savings worth £48 million.
Co-op Bank has approximately 2.5 million individual and corporate customers and 50 branches across the country.