Britannia and CFS Merger - Smart Business Move during Tough Times?

Submitted by: genwright

October 12th saw the revelation of talks between Britannia and the CFS or the Co-Op's Financial Services about a merger that would form a mutual tie up between the two businesses thus forming a new one with a little over 6 million valued customers and £70 billion in assets. Both Britannia and CFS made it apparent that the talks are still in its earliest stages and that it is part of a larger discussion about both of them working together. But at such unpredictable and volatile times, is this merger really a good idea? While both companies seem to be stable in terms of their financial health both believe that this tie up would offer their customers a kind of consumer owned option when it comes to the PLC market. Britannia which is based in Staffordshire currently employs around 2,000 people from that area. When asked to comment about the possible effects of this merger to both customer and staff, Britannia's chief executive, Neville Richardson only said that it is too early to discuss such matters. Nationally, Britannia employs about 5,000 people and there isn't any word regarding whether or not their nearly 3 million members would somehow receive a kind of windfall payment caused by this merger.

Neville Richardson was also quoted saying that 'As two like minded, forward thinking and financially capable mutuals, we're in talks with CFS about the possibility of working together in order to create a new and exciting proposition for our members". So far, the only assuring comment here is the fact that Neville Richardson mentioned the fact that they intend to stay committed to their companies branch in Leek, their base in Staffordshire and their extensive network as well as the Britannia brand. Although, this offers little solace to those who are constantly wondering about how many jobs such a merger would cost and the longer it takes the more stressful it becomes for everyone. Especially in today's economic climate, one can't help but imagine the worst.

Perhaps on a more chipper note, many analysts stand by the belief that this merger between Britannia and CFS isn't at all influenced by the on going global financial crisis which saw banks totally close down or bailed out by their governments. What this might be about, many speculate, is something in relation to a law which is expected to pass next year which would allow co-operatives to merge with mutuals for the first time. The merger would still have to be approved through a vote by the member's of Britannia. CFS which is based in Manchester is part of this co-operative group that also includes the co-operatives insurance as well as the co-operative bank that includes Smile. They offer savings accounts, current accounts, credit card accounts as well as loans. They also offer insurance products, investment supplies, pensions and investment bonds.

For now, everything is still up in the air and of course tensions continuously run high. The answer to the question posted above, "Is the merger a smart move in such tough times" can only be answered in time. Though many might speculate various things, one can never really predict how such things would pan out. In the mean time, all that a person can do is to wait and see what happens next.

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