Aviva Set to Acquire Direct Line in $4.6 Billion Deal

Aviva, a leading British insurance firm, is preparing to acquire Direct Line, a smaller competitor, in a transaction valued at 3.61 billion pounds (approximately $4.60 billion). This merger would create one of the largest home and motor insurers in the UK, with a combined market value of around 16.65 billion pounds ($21.23 billion), positioning the new entity as the second-largest insurer after Prudential. The transaction is the largest acquisition undertaken by Aviva's CEO Amanda Blanc, as part of her strategy to focus on core markets in the UK, Canada, and Ireland. The acquisition aims to enhance Aviva’s presence in less capital-intensive segments like motor and home insurance, further illustrated by recent deals, including the purchase of AIG's UK life insurance business and entry into Lloyd's insurance market. Analysts expect no regulatory hurdles and note that Direct Line shareholders will receive cash and Aviva shares, giving them a 12.5% ownership in the new conglomerate. Aviva is expected to make a formal offer by December 25. The acquisition is among the largest in London this year alongside the International Paper and DS Smith, and Thoma Bravo’s takeover of Darktrace.