The deal, which will take a year to complete, will produce Britain's fourth largest home mortgage lender, with 7 per cent of the market and aggressive plans to expand by undercutting the competition. The City expects a rash of takeovers of building societies by outsiders now Lloyds has set the pace.
The windfall for C & G's mortgage borrowers is a flat pounds 500 payment and most savers will also receive the same. But the biggest bonus for many customers will be a payment of at least 10 per cent of their savings as well.
The maximum amount payable on any one account is pounds 10,000, but some investors have more than one account. Those with deposit accounts that do not make them members of the society will get just the percentage payment.
The average voting member has pounds 12,000 invested with the society and will receive at least pounds 1,700. There are 840,000 voting investors and 60,000 depositors, as well as 370,000 borrowers.
The building society, the sixth largest, is following the Abbey National in shedding its mutual status, but Abbey floated on the stock market instead of selling out.
After C & G staff, pensioners, and eligible savers and borrowers have received pounds 500 each, the rest of the pounds 1.8bn will be shared among savers according to the size of their accounts. The qualifying amount is the lower balance on either 31 March or the completion day next spring.
If people reduce the balance in their accounts or close them altogether before the final qualifying date - yet to be announced - then there will be more left for those who remain.
It is too late for savers to join the pay- out. They have to have held an account on 31 December 1993 for the flat payment, and on 31 March 1994 for the percentage pay-out. But all borrowers on completion day - even those who take out a mortgage after today - will qualify for the flat pounds 500 payment.
Children cannot vote and their accounts will not qualify for the flat pounds 500, but they will get a percentage sum. Payments will come in the 1995-96 tax year and be subject to capital gains tax.
C & G members have to vote on the deal. The High Court also has to agree that an outsider can make cash payments to members, including those who have been with the society for less than two years, which the Building Societies Commission says is illegal.
The vote will take place in the autumn, and the deal is expected to be finalised after next April.
There will be no branch closures or job losses as a direct result of the take- over. C & G will keep its name and have access to Lloyds' 6 million