Aviva and Friends Life talk over all-share merger

There are around 2,500 Aviva employees in Scotland. Picture: PA

The potential combination would create the UK’s leading insurance, savings and asset management business by number of customers, but will also raise concerns about potential job losses across a combined group.

Aviva employs about 2,500 in Scotland including more than 1,000 in Perth.

In a statement issued after the stock market closed, Friends Life said it was prepared to recommend the offer, which values it at more than £5.5 billion, to its shareholders.

Friends Life was created in 2011 following the amalgamation of Friends Provident, the majority of Axa UK Life and Bupa Health Assurance.

The businesses were rebranded to form Friends Life Group, providing pensions, investments and insurance and retirement income products.

Today the company has more than five million customers, around 4,000 staff worldwide and manages funds worth in excess of £117 billion. A combination with Aviva would create a business with 16 million UK customers.

In a statement, Aviva said: “Over the past two years, Aviva has gone through a major transformation, creating significant value for its shareholders. The combination with Friends Life would accelerate Aviva’s transformation in line with its strategy of increasing group cash-flow and investing for growth in its chosen markets.

“The board of Aviva believes that the combination with Friends Life would deliver significantly higher cash flows enhanced by substantial synergies, principally through operating efficiencies in the combined back books and the removal of overlapping overheads.”

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