Aviva and Friends Life in merger talks

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Aviva and Friends Life are in talks about a possible £5.6bn merger deal, the two insurance companies have said.

Any tie-up would create the UK's leading insurance, savings and asset management firm by customer numbers.

Friends Life said it had "indicated to Aviva that it is willing to recommend the key financial terms of the possible offer to Friends Life shareholders".

Aviva would offer Friends Life shareholders 0.74 shares for each Friends Life share.

Friends Life was formed in 2011 after the amalgamation of Friends Provident, the majority of Axa UK Life and Bupa Health Assurance.

They were rebranded to form Friends Life Group.

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