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NU to link with CGU

The latest insurance industry merger proposal, confirmed last week by Norwich Union and CGU, has left repairers contemplating the potential business impact.

Norwich Union and CGU, itself a merger of General Accident and Commercial Union, would create a £26bn turnover giant called CGNU, with the expected loss of some 4,000 UK jobs.

Bob Hood, head of the Retail Motor Industry Federation Bodyshop Services Division, raised fears that CGNU would rationalise its combined approved bodyshop network, possibly cutting hundreds of repairers from the list.

“The merger will create uncertainty for many repairers and their staff,” he said.

The stockmarket reacted poorly to the proposal, NU shares tumbled 39.25p to 396.25p and CGU shares fell 22p to 774.5p, prompting speculation that a rival bidder could try to break up the deal.

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