Negotiations between two of the International Group of P&I Clubs in pursuit of a merger have broken down after 5 months of talks.
The UK and Britannia P&I Clubs, both of which have significant amounts of Hong Kong-registered tonnage entered, said yesterday: “While a number of potential synergies and benefits were recognised, no agreement could be reached on acceptable terms, and the discussions have now been terminated. Neither Club could be drawn to make further comment on the failure of the merger talks.
Insurance broker Tysers commented: “The news is something of a surprise given the positive comments from both Clubs earlier in the year, and it does confirm the inherent conservatism within the P&I industry which has prevented previous efforts by Clubs to merge. This and further good financial results from the International Group in 2016 will no doubt dissuade other Clubs from looking at joining forces.”
Had the merger gone ahead it would have created the largest P&I facility by some considerable margin. At the time of the announcement that talks toward merger were going to take place it provoked both surprise and shock. Surprise because if any mergers were going to take place they were expected to occur among the smaller players. Shock because owners entered with both Clubs were unaware of the proposal in the month when renewals were being completed.
The Sunderland Club and North of England P&I successfully merged in 2014 to become North P&I Club.