Aviva has confirmed it is aiming to buy rival insurer Friends Life in a deal worth £5.6bn.
Aviva said it had reached agreement on key financial terms, adding the combined businesses would create the “UK’s leading insurance, savings and asset management business”.
It would also strengthen both company’s balance sheets, which would accelerate dividend growth. The combined businesses would have 16 million customers, a note to the stock exchange said.
The deal would see Aviva offer Friends Life shareholders 0.74 shares for each Friends Life share.
It would also boost profits and assets under management at Aviva Investors through the addition of Friends Life’s UK assets under administration which are mainly outsourced at present.
Aviva has a market value of £15.7bn, compared to £4.85bn of Friends Life, according to a Sky News report.
