AVIVA, owner of the Norwich Union brand, today put pressure on rival insurer Prudential to come to the negotiating table by revealing the terms of its proposed £17 billion takeover.
The UK's biggest insurer said it was only prepared to press ahead with the all-share deal to create a £36bn global life and insurance giant if it had the backing of the Pru's board.
But its overtures were rejected by directors of the Prudential a
t the weekend and Aviva today went public with its proposal in a bid to persuade shareholders to swing behind a tie-up.
The indicative offer represents a ten per cent premium on the Pru's share price last Thursday when Aviva approached its rival and is equivalent to 708 pence a share.
It will see Aviva boss Richard Harvey stay as chief executive with estimated cost savings of around £320 million a year.
Outlining the terms of the offer, Mr Harvey today said: "This is a real opportunity to create a leading player in the global savings, investments and insurance market.
"The group would have significant presence and growth opportunities in Europe, Asia and the United States.
"This is a value-creating proposition for the shareholders of both companies."
Around 42 per cent of operating profits of the combined group would be made in the UK, with 28 per cent coming from Europe, 17 per cent from North America and ten per cent in Asia.
In the UK, the combined group would be the largest life assurer, making £456 million profits on £2bn sales of new business.
The Pru has refused to enter talks with Aviva over its proposal, stating that a combination of the two companies was not, in its view, in the best interests of its shareholders.
The full article contains 322 words and appears in Edinburgh Evening News newspaper.
