19th Jan 2015 17:05
LONDON (Alliance News) - Aviva PLC's move to acquire life insurance peer Friends Life Group Ltd for GBP5.6 billion could result in the loss of up to 1,500 jobs across the combined group, according to a prospectus published on Monday.
Aviva, the life, general insurance and asset management business, had previously said it was looking to generate about GBP225 million of run-rate annual cost synergies by the end of 2017 from the deal. It hadn't detailed exactly how many jobs could be cut.
The company said the precise nature of the jobs to be cut is yet to be determined.
Aviva had 27,700 employees in continuing operations at the end of 2013, while Friends Life had 3,749, including 388 at Lombard, the Luxembourg-based tax and estate planning business for high net worth individuals it has since sold.
The combined group also will look to achieve the GBP225 million cost savings by recapturing previously outsourced asset management contracts, and through the possible reduction of corporate and development costs across the two businesses.
The takeover deal requires the approval of shareholders and regulators.
Aviva shares closed up 0.7% at 509.83 pence on Monday, while Friends Life shares closed up 1.2% at 386.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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