Aviva completes DLG takeover in £3.7bn deal
UK motor insurer Aviva has announced it has agreed a DLG takeover in a deal valued at about £3.7bn.
The move will create a combined group with about 14% of the UK motor insurance market.
Aviva currently quotes 13 motor insurance products under the Aviva, General Accident, M&S, and Quotemehappy brands while DLG brands include Churchill, Darwin, and Privilege.
It’s understood the takeover will result in cost savings of about £125m, with a large part of that coming from cuts of between five and seven per cent of the combined workforce over the next three years, which equates to about 2,300 job cuts.
DLG takeover
Amanda Blanc, Aviva chief executive, said: “This deal is excellent news for the customers and shareholders of Aviva and Direct Line. It builds on our track record of delivering four years of strong financial performance and, in line with our strategy, it accelerates our growth in capital light business.
“Aviva and Direct Line share a deep commitment to excellence in looking after customers, and this will remain a top priority following the acquisition. The financial strength and scale of the combined group means customers will benefit from competitive pricing, an enhanced claims experience and even better service.
“The acquisition of Direct Line by Aviva will bring together a number of the UK’s leading brands in a more efficient business, which is very well positioned to generate strong returns for all shareholders.”
Competitive market
Adam Winslow, chief executive officer of Direct Line, said: “Direct Line is an excellent business, home to many well-loved insurance brands, and this year we have made fast progress on our turnaround strategy. Bringing Direct Line and Aviva together offers the opportunity to create a strengthened and enlarged business, with both organisations sharing a deep passion for serving customers and for supporting their people.
“In a highly competitive UK general insurance marketplace, the combined entity will be very well placed to deliver for its customers. I am proud of what Direct Line has achieved to date, and this offer will enable the business to continue to succeed as part of a combined group with Aviva.”
DLG initially rejected an offer of £3.3bn from Aviva last month before recommending to shareholders a revised offer a week later.
