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Dealwatch: Magic Circle lead on £5.2bn Aviva takeover of Friends Life

In one of the biggest deals the UK insurance sector has seen in years, Aviva‘s acquisition of Friends Life for £5.2bn has also gifted Magic Circle trio Linklaters, Allen & Overy and Clifford Chance with leading advisory roles.

Unveiled today (2 December), the deal includes a pledge to deliver £225m of annual cost savings at the expanded insurance group within three years of the acquisition. Linklaters advised Friends Life, with a team led by corporate partner Matthew Bland, while Allen & Overy corporate finance partner David Broadley advised Aviva on the deal. A team from Clifford Chance, co-led by capital markets partner Simon Thomas and corporate partner Lee Coney advised JP Morgan and Morgan Stanley which acted as financial advisers to Aviva.

Commenting on the proposed acquisition, Aviva chairman John McFarlane, said: ‘Aviva’s recent success and sound growth and return prospects already present a compelling investment proposition and enable us to advance our strategy through acquisition as well as organic growth.

The proposed acquistion not only consolidates Aviva’s leading position which Aviva has established in the UK, it is expected to enable a much stronger dividend flow and balance sheet position than would otherwise have been possible. It also offers Friends Life shareholders an attractive outcome.’

This heavyweight mandate follows Aviva’s overhaul of its main corporate panel in 2013 when Allen & Overy won a place alongside Slaughter and May as main board adviser, replacing Clifford Chance. These two firms were then automatically included in a eight-firm panel for UK and international work, which includes Linklaters.

Firms listed on the panel are typically called on for Aviva’s strategic corporate and contentious work. In order to secure a place on the panel, advisers were required to give assurances that they will act for Aviva in a wide context, including potentially against a bank.