Aviva reaches agreement to acquire Direct Line

According to Bloomberg, Aviva reached a preliminary agreement to buy Direct Line Group for £3.6 billion ($4.6 billion). Late last month, Direct Line rejected a £3.3 billion ($4.2 billion) acquisition proposal from Aviva.

In a statement to shareholders, the board of Direct Line noted that it remains confident in Direct Line’s prospects as a standalone company and continues to have conviction in the capabilities of the newly established leadership team to deliver the announced strategy. The board added that it had carefully considered the proposal with its advisers and consulted with Direct Line shareholders during the offer period and had concluded the proposal is at a value that it would be minded to recommend to Direct Line shareholders should there be a firm intention to make an offer.

If the deal goes through, the merged group would have about a fifth of the motor insurance market.