Insurance giant Aviva is making a final push to complete its £3.6 billion acquisition of Direct Line Group before a Christmas Day deadline set by the City’s Takeover Panel. The proposed deal, which values Direct Line at 275p per share, would create Britain’s second-largest car insurer.
Dame Amanda Blanc, Aviva’s chief executive, launched the surprise bid last month for the owner of prominent brands including Churchill and Green Flag. The revised cash and share offer came after an initial 250p per share proposal was rejected by Direct Line’s board.
Direct Line, now led by former Aviva executive Adam Winslow, has been undergoing significant transformation. Winslow, who joined in March, has implemented cost-cutting measures, including the reduction of 500 positions from the company’s 10,000-strong workforce. The firm recently announced its debut on price comparison websites, securing a notable partnership with Compare the Market.
While the Takeover Panel’s deadline looms, industry sources suggest Aviva could request an extension if needed. However, the FTSE 100 insurer is reportedly keen to finalise the agreement before Christmas Day. The merger would strengthen Aviva’s position as the UK’s largest home insurer whilst significantly expanding its automotive insurance portfolio.
The deal marks Direct Line’s second takeover approach this year, following earlier interest from Belgian insurer Ageas. Aviva maintains that the acquisition will deliver substantial synergies and create additional value for shareholders of both companies, while offering Direct Line’s customers access to enhanced services through Aviva’s broader infrastructure.
At market close, Direct Line shares were trading at 242p, while Aviva’s stock stood at 456p, reflecting market sentiment around the proposed acquisition.
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