Aviva completes Direct Line acquisition for £3.7bn
Aviva plc today announced it has completed its acquisition of Direct Line. The deal was effected by a scheme of arrangement under Part 26 of the Companies Act 2006 and became effective after delivery of the Court Order to the Registrar of Companies on 1 July 2025.
The acquisition was carried out by that court‑sanctioned scheme and will be accompanied by the admission of 378,143,305 new Aviva shares to the Official List and trading on the Main Market. Aviva expects those admissions to take effect by 8:00 a.m. on 3 July. Aviva shareholders will hold 87.5% of the enlarged entity and Direct Line shareholders 12.5%. Aviva has secured a £1.85bn facility agreement to fund the cash portion of the offer.
Aviva has published a phased integration and cost plan for Direct Line that targets £225m of cumulative cost synergies and earlier run‑rate cost savings of about £40m by the end of 2025. The group expects to incur implementation costs of roughly £50m as it consolidates systems and operations.
On the asset‑management side, Aviva intends to migrate more than £2.5bn of Direct Line assets into Aviva Investors before the end of 2025. This centralises a significant pool of insurance cashflows under Aviva’s in‑house investment management platform.
Aviva also highlights capital benefits as a material part of the transaction: the company is targeting more than £0.5bn of capital synergies, but that figure depends on Prudential Regulation Authority approval to include Direct Line in Aviva’s internal model for group capital purposes. Direct Line reported a Solvency Capital Requirement of £1.4bn as of its third‑quarter 2025 reporting; Aviva will need to reflect that measure when seeking regulatory consent for internal‑model inclusion.
The two insurers expect to complete a formal Part VII policy transfer — the legal process that moves insurance business between regulated entities — around the end of 2026. That process will follow a separate regulatory timetable from the scheme that closed the acquisition and from the share admissions.
The announcement names Amanda Blanc as Group Chief Executive Officer of Aviva plc and Danuta Gray as Chair of Direct Line.
Background
Aviva and Direct Line signed a definitive agreement in December 2024. The scheme route, the split of ownership in the combined entity and the financing package were set out as the transaction moved through court and regulatory approvals.
A note on market scale
Direct Line’s UK personal‑lines franchise sits in a market segment that generated at least £26bn of gross written premium in 2023, which underlines why the personal‑lines footprint of Direct Line featured prominently in Aviva’s rationale for the acquisition.
--- Sources: https://www.aviva.com/newsroom https://www.aviva.com/newsroom/news-releases/2025/07/aviva-completes-acquisition-of-direct-line/
