Lloyds agrees to terms for its mandated divestment of Verde

Lloyds Banking Group has agreed non-binding heads of terms with the Co-operative Group for the mandated retail and commercial divestment known as Verde. Upon completion (estimated by the end of November 2013), the Co-operative is expected to acquire: 632 branches; The TSB and Cheltenham & Gloucester brands. The Group is having ongoing constructive discussions on the transaction with the relevant governmental and regulatory bodies, and will now seek formal approval for the terms of the divestment. The Co-operative will pay the Group an initial consideration of GBP350M, and up to an additional GBP400M in present value – equivalent to around GBP800M on a nominal basis – based on the performance of the Co-operative’s combined banking business from completion up to 2027.