Job Losses Warning As Insurance Merger Agreed

The boss of Aviva has admitted there are likely to be job losses after terms were finalised for its £5.6bn takeover of Friends Life.

Mark Wilson told a conference call he would not put an estimate on the number of positions under threat as a result of the all-share deal, first reported by Sky News, which will create an insurance giant with 16 million life insurance customers.

He did confirm higher than expected annual savings of £225m by 2017.

Under the terms of the agreement, holders of Friends Life shares will receive 0.74 new Aviva shares and a second interim dividend of 24.1p-per-share.

Aviva said it proposed to pay a final dividend of 12.25p for 2014, up 30% on last year.

Andy Briggs, current group chief executive of Friends Life, will become CEO of Aviva UK Life, with Mr Wilson continuing as CEO of the enlarged Aviva Group.

He said it would create the UK's leading insurance, savings and asset management business by number of customers.

"It is one of those rare transactions where the two organisations fit with surgical precision, building on each other's strengths and addressing the challenges," he added.

But there has been speculation that the merger will result in up to 2,000 jobs being axed.

Aviva employs around 28,000 staff worldwide including 12,000 in the UK, while Friends Life employs 3,500 staff largely in offices in London, Manchester, Bristol and Salisbury.

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