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Sale of 90% stake in Gresham Insurance Company

Released 10:00 03-Feb-05

Legal & General Group Plc "Legal & General" today announces that it has agreed in principle to sell its 90% stake in its subsidiary Gresham Insurance Company Ltd ("Gresham") to Barclays Bank ("Barclays"), which already owns the remaining 10% stake, for a consideration of £85m.

Legal & General expects to book an after-tax profit of £26m, which will be reported in its 2005 results. The capital released from the sale of Gresham will be available for redeployment elsewhere within the Legal & General Group.

Robin Phipps, Legal & General's Group Director (UK Operations), said "The General Insurance relationship with Barclays has been a long and fruitful one for Legal & General, delivering a good return on capital. The sale of our interest in Gresham releases capital which will be available to support continued growth in both our core General Insurance and Life businesses.  Our wider relationship with Barclays continues to be strong."

Mike Rogers, managing director, Retail Banking, Barclays, said "The Gresham joint-venture with Legal & General, first set up with The Woolwich in 1995, has served both parties well over many years. We are grateful to all those involved with Gresham for the support and good service they have always provided both to Barclays as an organisation and to our customers."

Enquiries to:

John Morgan, Head of Public Relations
020 7528 6213
Anthony Carlisle, Citigate Dewe Rogerson
07973 611888

Peter Horsman, Head of Investor Relations
020 7528 6362

Notes to editors:

  1. Gresham's Gross Written Premiums (GWP) in 2003 were £147m. Legal & General Insurance's total GWP in 2003, including Gresham's GWP, were £426m. Gresham's post-tax profits in 2003 were £3m.

  1. The sale consideration and the after tax profit are subject to final audit.

  1. All staff affected by the sale of Gresham will be redeployed to other roles within Legal & General.

  1. The transaction contemplated by this announcement is expected to complete on 31 March 2005, subject to contract and FSA approval.

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