Aviva employs 5,000 in its UK life business, and Friends Life a further 3,700, according to the FT. The firms have hailed the creation of a “British champion” and claim they can cut £225m of costs by 2017 by combining forces.
However, in publishing its prospectus for the deal, Aviva acknowledged that around 1,500 jobs may go as a result.
“Aviva is looking to achieve cost synergies in those areas where it identifies there to be duplication, and to take opportunities to leverage the additional scale of becoming an enlarged group,” the company said.
“Aviva anticipates that this may result in a reduction of approximately 1,500 roles from the headcount of the Enlarged Aviva Group of approximately 31,500.”
The company added: “At this stage, no specific teams, roles or locations have been identified.”
Major shareholders, including Old Mutual’s Richard Buxton, have thrown their weight behind Aviva’s takeover bid, saying the deal would strengthen both businesses.
The fund manager (pictured), whose firm is Friends Life’s eighth largest shareholder, told the Telegraph: “This is a case of two plus two equals a lot more than four.”
The combined company, which will continue under the Aviva name, will serve 16m customers – a quarter of UK households.
Jupiter Asset Management senior fund manager Alastair Gunn, also a Friends Life investor, has been upping his stake in the firm in recent weeks and also plans to give his approval.
He said the deal would give “exposure to a stronger long-term growth story” and the combined company would be run “by an impressive management team”.
Other industry figures previously said they feared a merged business will mean worse customer service and less competition.
The comments came as the two companies prepare to send out circulars to investors laying out the full terms of the deal and giving them 21 days to cast their vote.
