Aviva tries to sweet-talk shareholders on merits of £5.6bn tie-up with rival Friends Life
Aviva is this weekend aiming to persuade its own shareholders of the merits of its proposed deal for a £5.6billion tie-up with rival Friends Life.
The agreed deal was leaked on Friday, accelerating a merger plan the pair had been discussing for several weeks. Aviva is offering 0.74 Aviva shares for every Friends Life share, valuing each Friends Life share at just under 399p. Friends Life shares closed at 347.7p on Friday.
Aviva is understood to have begun talking to its biggest investors including The People’s Republic of China, the insurer’s seventh largest shareholder, about the deal.
Merging: Aviva is this weekend aiming to persuade its own shareholders of the merits of its proposed deal for a £5.6billion tie-up with rival Friends Life
The merger will create a big player in the protection market – insurance policies covering customers against critical illness –with some suggesting it would double Aviva’s market share. Sources yesterday insisted that the deal was unlikely to pose any competition concerns, however.
Friends Life is also strong in providing pension schemes for large companies, whereas Aviva has a bigger share among smaller firms.
Friends Life saw its share price plummet earlier this year after the Chancellor announced reforms to the annuities market that mean pension savers will no longer have to buy the products – but it has recovered much of the ground since and the offer is above the highs the shares reached in March before the annuity announcements.
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