Aviva set to complete Direct Line takeover in July

By Ryan Hewlett

June 17 - (The Insurer) – London-listed Aviva said on Tuesday that its 3.7 billion pound ($4.79 billion) takeover of rival Direct Line is set to complete next month following "constructive" talks with the UK’s competition watchdog.

Aviva and Direct Line said in a joint stock exchange filing that the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have each given written notice approving the acquisition.

“As a result, Aviva and Direct Line are pleased to confirm that all conditions relating to the receipt of regulatory and antitrust approvals have now been satisfied or (where capable of waiver) waived,” the insurers said in a statement on Tuesday morning.

The UK’s Competition and Markets Authority (CMA) is due to publish the findings of its phase one investigation on the takeover in early July, but Aviva said it was “confident” the watchdog would greenlight the deal.

"Following constructive engagement with the CMA, Aviva remains confident of securing unconditional clearance by the phase 1 statutory deadline," it said.

The sanction hearing to finalise the transaction is scheduled for July 1. Aviva said the deal is expected to become effective from that date.

The deal, first announced in December, will see Aviva pay 3.7 billion pounds for DLG, which had previously rebuffed two lower bids from Belgian insurer Ageas earlier in 2024.

The deal with Aviva, which offered Direct Line Group’s shareholders a 73.3% premium, is expected to close in mid-2025, subject to regulatory approval.

In its full year results in February, Aviva said the acquisition of Direct Line Group was an acceleration of its strategy to power returns through capital-light businesses, which now make up more than 56% of its operating profits, according to Aviva’s 2024 results.

The deal will create a leading UK P&C insurer, with a share of around a fifth of the country’s home and motor insurance markets.