Aviva shareholders have approved the proposed acquisition of Friends Life by Aviva, it was announced today (26 March).
An overwhelming majority were in favour of the move, at 99.79 per cent of votes cast in favour of the ordinary share capital of Friends Life Group being approved and the directors of Aviva to be authorised to implement the acquisition.
A majority of 99.75 per cent were in favour of the directors of Aviva being authorised to allot new ordinary shares, up to an aggregate nominal amount of £276,250,000.
In December last year, Aviva agreed to buy Friends Life in a deal worth £5.6bn.
The acquisition plan saw Friends Life shares valued at 394p, including a second dividend of 24.1p, and the company subsequently being rebranded as Aviva. After the deal was announced, Aviva’s share price fell by 3.9 per cent.
Shareholders of Friends Life will own approximately 26 per cent of the enlarged group under the terms agreed.
The merger will mean the firm will have 16m customers and the group believes Friends Life’s 5m customers will benefit from broader product offer.
Under the terms of the possible offer, which has not yet been approved by the regulator, Aviva would acquire the entire ordinary share capital of Friends Life on the basis of an exchange ratio of 0.74 Aviva ordinary shares for each Friends Life ordinary share.
Ahead of the takeover, that will create the largest life and pensions firm in the UK, both Aviva and Friends Life reported improved profits for 2013 in results published on 5 March.
Aviva’s operating profits last year increased by 6 per cent to £2.2bn and the value of its new business rose by 15 per cent on 2013 figures.