Aviva Plc and Direct Line Insurance Group have reached a preliminary agreement to acquire the entire share capital of Direct Line. The deal is valued at 275 pence per Direct Line share, comprising a mix of

• 129.7 pence per Direct Line share in cash, funded through Aviva’s internally available cash resources;
• 0.2867 new Aviva shares per Direct Line share; and
• dividend payments of up to 5 pence per Direct Line share in aggregate (the “Permitted Dividend”), to be paid (subject to the approval of the Board of Direct Line) prior to completion.

This offer represents a 73.3% premium to Direct Line’s closing share price on November 27, 2024, before the offer period began.

The acquisition aligns with Aviva’s strategic objectives and is expected to generate significant synergies, benefiting shareholders of both companies. Direct Line shareholders would own approximately 12.5% of the combined entity if the deal proceeds. However, the final announcement is contingent on customary due diligence and regulatory conditions.