$AV - Aviva, Friends Life Agree to Deal
2:30 AM ET 12/2/14 | Dow Jones
By Ian Walker
LONDON-- Aviva PLC and Friends Life Group Ltd. on Tuesday said they had reached agreement on a GBP5.6 billion ($8.8 billion) deal that would create the U.K.'s largest insurance, savings and asset-management company.
Under the deal, Friends Life shareholders will get 0.74 new Aviva shares for every share they hold, valuing the shares at 394 pence, including a second interim dividend of 24.1 pence. Friends Life shareholders will own 26% of the enlarged Aviva.
The combined group would have a market capitalization of GBP19.88 billion based on the companies' closing share prices on Monday.
Aviva said it expected the deal to generate approximately GBP225 million of annual cost savings by the end of 2017, and allow it to pay bigger dividends to shareholders.
Aviva initially announced the deal last month after a leak.
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December 02, 2014 02:30 ET (07:30 GMT)
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