UK - Friends Provident's board has recommended shareholders accept the latest acquisition offer from Resolution.
The deal, which values Friends at £1.86bn (US$3.06bn), will see Trevor Matthews continue in his role as chief executive of the insurer.
Existing Friends shareholders will receive 0.9 new Resolution shares per Friends Provident share and a cash consideration of 79.5p for the first 2,500 shares held by each shareholder.
Based on Resolution's 7 August closing share price of 88.25p, investors will receive the equivalent of 79.5p per Friends Provident share.
Friends shareholders will receive an interim dividend of 1.3p per share prior to the acquisition.
Last night, Friends Provident shares closed at 75p, valuing the deal at a 5.9% premium.
The acquisition will mark the beginning of Resolution's project to consolidate and restructure businesses in the life and asset management sector.
It believes Friends Provident will bring an experienced management team to Resolution, along with a strong capital position and a good fit with other possible acquisitions.
However, Resolution said it does not expect to be the long-term owner of Friends. It will likely sell the insurer once it has created an enlarged and restructured life and asset management group in two to four years time.
Resolution Holdings (UK) Ltd will be renamed Friends Provident Holdings (UK) Ltd, with Matthews staying on as chief executive and Evelyn Bourke will continue as chief financial officer. Clive Cowdrey and John Tiner will join the board as non-executive directors.
"The executive team and I are enthusiastic about the future with Resolution," Matthews said.
"We look forward to playing a leading role in industry consolidation and re-shaping the new business landscape."
Separately, Friends Provident said it signed a contract with technology provider FNZ to provide an enhanced workplace platform to be delivered during 2010.
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