(AFP/BEN STANSALL)
The agreement for the takeover of the British insurer Direct Line Insurance by its competitor and compatriot Aviva has been sealed, the two groups announced Monday in a joint press release, an operation worth around 3.7 billion pounds (4.4 billion euros).
With this buyout, partly in cash and partly in shares, Direct Line shareholders will hold approximately 12.5% of Aviva's capital.
This acquisition should make it possible to create “a leading franchise in personal insurance in the United Kingdom”, it is emphasized in the press release.
Direct Line rejected a first offer from Aviva at 3.3 billion pounds at the end of November, before announcing an agreement on this new offer on December 6.
“This deal strikes a balance that appears to bring value to both parties,” said Matt Britzman, analyst at Hargreaves Lansdown.
“Direct Line is navigating through troubled waters” and “could not deny that Aviva’s offer is a golden ticket that it would have had difficulty reproducing on its own,” he notes. “For Aviva, the price is at the limit of what could be considered a bargain, but the strategic potential could prove very attractive.”
Around 08:20 GMT, shortly after the London Stock Exchange opened, Aviva shares were stable at 0.06%, the stock having jumped on December 6 when the deal was announced.
