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Aviva in talks to buy £5bn Friends Life

Aviva is in advanced talks to buy Friends Life in a deal potentially worth £5bn.

Aviva, which has a market value of nearly £15bn, is working on a share combination deal to buy Friends Life, which has a market value of £5bn.

The talks are at an advanced stage with Goldman Sachs acting for Friends Life and Morgan Stanley and Robey Warshaw for Aviva.

Aviva says adding 5 million Friends Life customers will create the biggest insurance and savings business in the UK with 16 million customers.

The insurer says the deal will lead to a substantial increase in profits and assets under management at Aviva Investors.

It says over time Friends Life’s UK assets under management, currently outsourced, will materially increasing Aviva Investors’ total assets under management.

On life insurance, Aviva says it will be in a better position to invest and innovate in pension freedoms next year.

It says the transaction would lead to a substantial increase in Aviva’s protection value of new business, more than double Aviva’s corporate pension assets under administration and create new opportunities by serving Friends Life’s £2bn of annual pension vestings.

A joint statement from the providers says: “The boards of Aviva and Friends Life note the recent press speculation and confirm that they have reached agreement on the key financial terms of a possible all share combination of Aviva and Friends Life.

The board of Friends Life has indicated to Aviva that it is willing to recommend the key financial terms of the possible offer to Friends Life shareholders, subject to reaching agreement on the other terms and conditions of any offer and the completion of mutual due diligence.

“Any transaction would be subject to regulatory approval. 
A combination of Aviva and Friends Life would create the UK’s leading insurance, savings and asset management business by number of customers, with a stronger balance sheet and significantly higher cash flows, enhanced by substantial synergies, from which to accelerate dividend growth.”


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Really, therefore, my Colonial Mutual mortgage endowment policy I arranged in 1991 for myself, which became Colonial, then Winterthur, then AXA, then Friends Life and now perhaps Aviva! Is this a record?

  2. Laurens van Buren 21st November 2014 at 7:18 pm

    @rayleigh. And it’ll probably still fail to pay off the mortgage

  3. Surely this deal needs to be referred to the mergers and monopoly commission.

    Have we learned nothing from the banking crisis as companies like this should not be allowed to be too big to fail.

    I also believe that many of these deals are a serious detriment to consumers as often they involve lots of job losses in administration roles that then end up giving a worst customer service to consumers.

    Many of these deals also fly in the face of FCA rules on spans of control and adequate systems.

    It’s time that the regulator and mergers monopoly commission woke up to the potential problems caused by this type of deal.

  4. @Laurens, it definitely won’t repay what it was supposed to. It hasn’t paid an annual bonus in years. The original sum assured was £28,500.00. I will be lucky to get back £15,000.00 and I advised myself! The thought of Aviva taking on another project is a concern, as they can’t cope with what they have! Their platform/wrap service, in my experience, is appalling.

  5. These providers never fail to depress me more than they did on the previous occasion.

    The bad apple in that crock of pooh is the combined liability of several networks.

  6. John Alistair West 23rd November 2014 at 10:16 am

    Surely not. Aviva’s administration is thee worst in the industry. Each and every query I make on behalf of a client, they get it woefully wrong, when they try to fix it, it actually goes from bad to worse. Friends Life, most of the time, make a decent job of things so I for one think this is a disaster waiting to happen. Clients and advisers alike will suffer from this awful marriage.

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