It has just been announced that Aviva, the UK insurance company, is to take over Friends Life. This is to include all companies in the Friends Life Group, including Friends Provident International which operates out of the Isle of Man, but has been predicted by industry insiders for a while.
Whilst the deal needs to approved by shareholders and regulatory authorities before the acquisition can go ahead, no opposition is expected and the transaction should go through in the first half of 2015.
The deal is believed to be worth around £5.6 billion and will lead to the creation of the UK’s largest savings, insurance and asset management company. Friends Provident has suffered following the overhaul of the UK pension annuity market and Aviva has sold a number of its unprofitable businesses over the last couple of years. Markets have reacted fairly positively.
As far as business in the UAE is concerned there is likely to be little difference going forward as Aviva pulled out of this market a few years ago and Friends Provident International will re-brand in due course. The combined value and influence of the new merged company should benefit shareholders, investors and policyholders. There is no cause for concern and for now it is business as usual.
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