British insurer Aviva says its acquisition of competitor Friends Life could bring about approximately £225 million of annual cost synergies by 2017.
These savings would be achieved by integrating the companies' operations, recapturing previously outsourced asset management contracts and by reducing corporate and development costs across the two businesses, Aviva added.
The deal values Friends Life at £5.6 billion and is set to create the dominant player in the life insurance market.
However Aviva, which employs around 16,000 people in the UK, said there were likely to be approximately 1,500 job losses from the enlarged Aviva Group, which will have a workforce of 31,500 people.
“We appreciate that this news may be disconcerting for employees and we would look to ensure that any redundancies are kept to a minimum wherever possible, by using vacancies and natural turnover, for example,” said an Aviva spokesperson.
“At this stage, no specific teams, roles or locations have been identified as the proposed transaction has not completed. When we are clearer on this, following completion of the deal, we will fully engage and consult with employees and their representative bodies.”
The merger is likely to be completed around mid-April this year.
The company confirmed current management teams would be kept mostly intact, with Aviva CEO Mark Wilson heading group activities and Friends Life CEO Andy Briggs set to become the CEO of Aviva UK Life.