Combined group would control a fifth of UK motor insurance market
Aviva, the UK insurance heavyweight, has agreed a £3.6bn takeover deal with Direct Line, after winning over its smaller rival with a sweetened bid. The preliminary deal, announced in a joint statement by the companies on Friday, will see Aviva pay 275p per share for the motor insurer best known for its mascot of a red phone on wheels. The price is about a 10 per cent increase on the FTSE 100 group’s initial 250p approach in November, which consisted of cash and shares.
Shareholders in Direct Line, whose stable of brands includes Churchill and Green Flag, would own approximately 12.5 per cent of the issued and to be issued share capital of Aviva. After consulting with advisers and shareholders, Direct Line’s board would be “minded to recommend” the deal to the group’s shareholders, said the companies in their joint statement.
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