Aviva Reaches Deal On Terms Of GBP 5.6 Bln All-share Acquisition Of Friends Life

(RTTNews) - British life and health insurer Aviva plc (AV.L, AV) Tuesday announced that it has reached agreement on the terms of a recommended all-share acquisition of smaller rival Friends Life Group Ltd. (FLG.L).

Under the terms of the proposed acquisition, share holders of Friends Life will receive 0.74 new Aviva shares for each Friends Life Share they hold.

Based on the Exchange Ratio and the closing price of Aviva and Friends Life shares as at November 20, the deal, excluding the payment to RCAP in relation to the Value Share and Friends Life's proposed second interim dividend payment in respect of the 2014 financial year, values each Friends Life Share at 394 pence and Friends Life's existing issued ordinary share capital at approximately 5.6 billion pounds. This represents a premium of 15 percent to the closing price of Friends Life Share on November 20.

Based on the Exchange Ratio and the Closing Price of Aviva as at 1 December 2014, the deal values each Friends Life Share at 370 pence, which represents a premium of 8 percent to the closing price on November 20.

The proposed acquisition would result in Friends Life Shareholders owning approximately 26 percent of the issued ordinary share capital of the Enlarged Aviva Group.