David Howell of Guardian Wealth Management writes

Aviva set to table £5bn offer for Friends Life? In our industry, mergers and acquisitions are commonplace. Friends Life itself only began in 2011, as an amalgamation of Friends Provident plc, the majority of the AXA UK Life insurance business and Bupa Health Assurance. However now it seems their customers are set for more change. Already, Friends Life clients and indeed advisers often struggle to know which number to call, where to post their documents and which button to press on the dreaded phone lines, such is the administrative hangover which continues from this last merger. Indeed, when a new client arrives with Friends Life, AXA, Friends Provident or Bupa documentation, an audible sigh may be heard around the office. It’s not that the products are necessarily poor, or even that the client may be trouble, but simply that the advisory staff are aware of the challenge ahead in dealing with legacy policies. Perhaps though, by joining Aviva, we will have clarity and improved systems to deal with? Aviva believe that this little bit of business will better their positioning in the markets; allow them to offer greater stability and improved rates in their underwriting and life cover, while refining their systems ahead of the major pensions changes coming in April next year where they will strive to allow flexible drawdown functionality across all modern pension plans. Aviva – one of the biggest brands in the industry are rumored to be close to tabling an offer in excess of £5bn. A joint statement from the providers says: “The boards of Aviva and Friends Life note the recent press speculation and confirm that they have reached agreement on the key financial terms of a possible all share combination of Aviva and Friends Life. “The board of Friends Life has indicated to Aviva that it is willing to recommend the key financial terms of the possible offer to Friends Life shareholders, subject to reaching agreement on the other terms and conditions of any offer and the completion of mutual due diligence. “Any transaction would be subject to regulatory approval. A combination of Aviva and Friends Life would create the UK’s leading insurance, savings and asset management business by number of customers, with a stronger balance sheet and significantly higher cash flows, enhanced by substantial synergies, from which to accelerate dividend growth.” David Howell – Guardian Wealth Management

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