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Friends Life kept on CreditWatch by S&P

Friends Life kept on CreditWatch by S&P

Standard and Poor’s has kept Friends Life on an A-rating in anticipation of its planned deal with Aviva.

Friends Life is expected to be purchased by Aviva when the latter firm’s shareholders meet to vote on the £5.6bn deal in March.

In a statement issued this week S&P said it was keeping Friends Life’s ratings on CreditWatch with positive implications.

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It said: “The continuing CreditWatch placement recognizes that the proposed acquisition is subject to a number of conditions, including Aviva shareholder approval, no objections from regulators and the sanction of the court.

“Following the satisfaction of all conditions for the proposed acquisition, we are likely to raise the ratings on Friends Life by one notch, based on group support.”

It added: “If the transaction does not proceed, we are likely to affirm the ratings on Friends Life.”

Adviser view

David Burren, managing director of Gloucestershire-based Warwick Butchart Associates, said: “I think both these organisations have become so remote from the investor community.

“They are such large organisations that we find it difficult to communicate with them, so from that point of view the merger isn’t necessarily a positive thing.”