Aviva agrees to acquire Friends Life
UK insurer Aviva has agreed to acquire pensions company Friends Life for £5.6 billion.
The deal offers a 15 percent premium to Friends Life’s closing price on November 20, 2014 and a premium of 27 percent to the average closing price of a Friends Life share for three month period ended November 20, 2014.
Following the acquisition, Andy Briggs, the current group chief executive of Friends Life, will become chief executive officer of Aviva UK Life and will join the board of Aviva as an executive director.
Malcolm Williamson, the current chairman of Friends Life, will join the board of Aviva as senior independent director.
Aviva said it expected the company to generate £600 million in excess cash a year and generate approximately £225 million of run-rate annual cost synergies by the end of 2017, which Aviva has valued at approximately £1.8 billion.
Mark Wilson, chief executive officer (CEO) of Aviva, said: "This acquisition is financially and strategically compelling. It is one of those rare transactions where the two organisations fit with surgical precision, building on each other's strengths and addressing the challenges.
“This is good for shareholders and customers alike who will benefit from being part of a stronger, more diversified and resilient business with a wide range of products."
Andy Briggs, CEO of Friends Life, said: "Friends Life has always been about maximising value for shareholders and delivering strongly for customers. The compelling combination of Friends Life and Aviva provides an excellent opportunity to accelerate our existing strategy and growth, generating value for shareholders faster.
“The enlarged group brings together complementary strengths and a commitment to delivering the very best propositions, service and expertise for customers. I'm delighted to be joining the board of Aviva as part of the leadership team, committed to driving forward the group's investment thesis of cash flow and growth. Together we will have scale leadership positions across our chosen growth markets, ensuring that the new group is well placed to take advantage of the opportunities presented by the rapidly evolving UK life insurance market."