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| Version 1 | Version 2 |
|---|---|
| Friends Provident in merger talks | Friends Provident in merger talks |
| (20 minutes later) | |
| Two of the UK's largest insurers, Friends Provident and Resolution, are in talks to merge. | Two of the UK's largest insurers, Friends Provident and Resolution, are in talks to merge. |
| The move, which would create a firm worth about £8bn, prompted shares in both companies to rise 7%. | |
| The move came as speculation rose that a rival offer may be made for Friends Provident, with reports linking Axaand Standard Life to a bid. | |
| Friends and Resolution confirmed the "advanced" talks on Monday and a deal may be unveiled within a fortnight. | Friends and Resolution confirmed the "advanced" talks on Monday and a deal may be unveiled within a fortnight. |
| 'Significant value' | 'Significant value' |
| Shares in Friends Provident rose 7.3% to 200p in early trading in London while shares in Resolution gained 6.9% to 672.5p. | |
| Friends Provident and Resolution believe that a merger would create significant value for both sets of shareholders Resolution statement See Friends Provident shares See Resolution shares | |
| The proposed all-share deal would see Resolution shareholders control about 51% of shares in the combined business while Friends Provident investors would own the remainder. | The proposed all-share deal would see Resolution shareholders control about 51% of shares in the combined business while Friends Provident investors would own the remainder. |
| "Friends Provident and Resolution believe that a merger would create significant value for both sets of shareholders," Resolution said in a statement. | "Friends Provident and Resolution believe that a merger would create significant value for both sets of shareholders," Resolution said in a statement. |
| Under the proposal, Resolution's chairman Clive Chowdery would head the joint group. | Under the proposal, Resolution's chairman Clive Chowdery would head the joint group. |
| Friends sells life protection, income protection, pensions and investment products throughout the UK to both individuals and businesses. | Friends sells life protection, income protection, pensions and investment products throughout the UK to both individuals and businesses. |
| Resolution became the UK's biggest manager of closed life insurance funds last year when it bought the closed life funds of the Abbey bank for £3.6bn. | Resolution became the UK's biggest manager of closed life insurance funds last year when it bought the closed life funds of the Abbey bank for £3.6bn. |
| Analysts say it would be a good fit with Friends as the cash it generates from its life policies could be used to fund an aggressive increase in business. | Analysts say it would be a good fit with Friends as the cash it generates from its life policies could be used to fund an aggressive increase in business. |
| Poor stock market returns and heavy regulation have led to many of Britain's life funds being shut to new business - known as closed funds. | Poor stock market returns and heavy regulation have led to many of Britain's life funds being shut to new business - known as closed funds. |
| A life fund takes premiums paid into life assurance policies and invests them in a range of assets, such as equities, property, fixed interest securities and cash. | A life fund takes premiums paid into life assurance policies and invests them in a range of assets, such as equities, property, fixed interest securities and cash. |
| Customers opening a policy in a life fund are deemed to purchase units in the fund. | Customers opening a policy in a life fund are deemed to purchase units in the fund. |