LONDON (Reuters) - British insurers Aviva and Friends Life said on Tuesday their boards have agreed the terms of their recommended all-share merger, creating a market leader with 16 million life insurance customers.
Holders of Friends Life shares will receive 0.74 new AVIVA (AV..LO)shares, valuing the deal at 5.6 billion pounds ($8.80 billion), unchanged from their announcement of a planned merger on Nov. 24.
Friends Life shareholders will also receive a second interim dividend of 24.1 pence per share. Aviva said it proposes to pay a final dividend of 12.25 pence for 2014, up 30 percent on last year.
Aviva said the merged company is expected to generate 600 million pounds in excess cash flow a year and about 225 million pounds in annual cost savings by the end of 2017.
(Reporting by Huw Jones; editing by Jason Neely)
