Aviva's Acquisition of Direct Line

Last month, Aviva completed its £3.7 billion takeover of Direct Line, the owner of the Churchill and Green Flag brands. The deal brought together two of the UK's biggest home and car insurers.

The deal was announced on 23 December last year, after Direct Line had rejected a takeover approach from Belgian insurer Ageas earlier in 2024. Aviva offered a mix of cash and shares, made up of 129.7p in cash and 0.2867 Aviva shares for each Direct Line share, plus up to 5p in dividends. After completion, Aviva shareholders would own around 87.5% of the combined group and Direct Line shareholders around 12.5%.

Because both companies are regulated insurers, the deal needed approval from the FCA and the Prudential Regulation Authority, which it received in June. It also needed clearance from the CMA, which opened a Phase 1 review in May with a deadline of 10 July. Aviva said it was confident of unconditional clearance and planned its court hearing for 1 July, before the CMA's deadline. The CMA cleared the deal on 1 July, the court sanctioned the scheme the same day and the deal completed on 2 July.

The CMA has since explained that the home and car insurance markets are fragmented, with enough competitors to keep the combined business in check. The UK merger regime is also non-suspensory, which means parties are not legally required to wait for CMA clearance before completing a deal, although most do.

Insurance mergers need sign-off from several regulators. Aviva was confident enough of the CMA's decision to plan its timetable around it, and completed the day after clearance.