Tue, 20 Jan 2015 | MERGER
A merger between Aviva and Friends Life will involve the cutting of around 1,500 jobs in a bid to make savings.
The £5.6 billion merger is the UK’s largest insurance company deal since CGU joined with Norwich Union to create Aviva back in 2000. Aviva currently employs 16,000 staff across the UK.
Friends Life has 3,700 employees, with most based at its office in Bristol, with smaller operations in Dorking.
An Aviva spokesperson commented: “Aviva expects to deliver approximately £225 million of annual savings by the end of 2017. This may result in a reduction of approximately 1,500 roles from across the enlarged Aviva Group of approximately 31,500 people.
"We appreciate that this news may be disconcerting for employees and we would look to ensure that any redundancies are kept to a minimum wherever possible, by using vacancies and natural turnover, for example.”
The firm did not release information on the specific locations or roles that will be targeted in the cost-cutting measure, which aims to save £225 million by 2017. The spokesperson said that after the deal is finalised – on 13 April, following final approval from shareholders at a meeting on 26 March – they would begin discussion on job cuts.
The merger deal will see Aviva take control of Friends Life’s entire ordinary share capital, leaving 26 per cent of the business to shareholders.
At the time of announcing the merger, Aviva said: “This acquisition is financially and strategically compelling. It will increase our cash flows, reduce our leverage and support continued growth in our dividend. It also secures our leadership position in our home market and gives greater flexibility to drive growth in other parts of the Aviva group.”
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