Shareholders of British insurers Aviva and Friends Life voted on Thursday for Aviva’s 5.6 billion pound takeover of Friends Life. Aviva’s share price suffered a blow after the terms of the merger were announced late last year. Apparently some investors and analysts were worried about the size of cost savings as well as the trouble of combining a range of IT systems. However, others said the merger made sense since it follows after UK government reforms that have put increasing pressure on insurance companies that offer pension services.

More than 99 percent of shareholders who voted were in favor of the deal, Aviva said in a regulatory filing after a general meeting. The successful insurance company needed the agreement of more than 50 percent of the votes cast. On the other hand more than 90 percent of Friends Life shareholders also voted in favor. This was revealed in a Friends Life general meeting in a separate filing. Friends Life said it expected its stock to delist on April 10.

Reports further state that holders of Friends Life stock will each receive 0.74 new Aviva shares for each Friends share. Aviva and Friends Life shareholders have agreed to the merger and this will create a huge insurance firm with more than 16m customers.

Around 99.9pc of the Friends Life investors that support the deal has overwhelmingly passed the 75pc threshold required for the two companies to combine. Aviva investors, on the other hand were less supportive. Around 99.8pc of voting shareholders supported the deal. The votes from all the shareholders represented the final major hurdle before this merger can be finally completed. The companies won clearance earlier this month from the European competition authorities. Clearance was also provided by the Financial Conduct Authority and the Prudential Regulation Authority in the UK.

This insurance company merger will take effect on April 10, before the shares begin trading for a single entity on April 13. Work can begin on phasing out the Friends Life brand after the deal closes and along with this is cutting about 1,500 jobs as part of the cost-saving program behind the combination.

Friends Life was created from the amalgamation of several pension portfolios has served 0one in every seven British savers with a focus on defined contribution pensions. With this merger it will represent one in four customers.

Andy Briggs is the chief executive of Friends Life. Mr. Briggs will become responsible for customers as head of the combined companies’ life insurance businesses.  On Aviva’s end, Mark Wilson will remain as chief executive after the merger. “We are delighted that our shareholders have today voted in favor of the recommended all-share acquisition by Aviva,” said Mr. Briggs. “The Friends Life board believes that the combination of the two businesses offers attractive growth opportunities for the shareholders of the enlarged group, as the increased scale will help drive better profitability, and improved service as our customers will benefit from access to a broader range of products.”

Further details of this merger will be provided as this will take effect on the first weeks of April.

By AL Mijares

About Aviva

Aviva plc is a British multinational insurance company with headquarters in London, United Kingdom. Aviva has more than 31 million customers all across 16 countries. In the UK Aviva is the largest general insurer and life and pensions provider. It has five markets in Europe and, in Asia; the company is focused on the growth markets of China and South East Asia. Aviva is also the second largest general insurer in Canada. The company has a listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has a secondary listing on the New York Stock Exchange. Aviva stock market evolution: http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary.html?fourWayKey=GB0002162385GBGBXSET1

About Friends Life

Friends Life Group Limited is a Guernsey-incorporated investment company. Recently, Friends Life has stated intent of forcing consolidation in the British life insurance industry with Aviva. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. Friends Life stock market evolution: https://uk.finance.yahoo.com/q?s=FLG.L

About Andy Briggs

Andy Briggs worked for Friends Life as CEO in June 2011. Previously, he was with Lloyds Banking Group in January 2007 as Managing Director, Marketing and Distribution in Scottish Widows. He was appointed CEO of Scottish Widows Group’s General Insurance businesses in December 2008. Before working as CEO, Briggs has spent 19 years at Prudential Group where he concentrated on Intermediated which focuses on face to face and online businesses both in the UK and in other countries. He also become CEO of the Retirement Income business.