The culmination of months of negotiation and regulatory navigation is now in sight for two of the UK’s insurance powerhouses, Aviva and Direct Line. July 1, 2025, has been set as the critical date for the High Court of Justice to sanction Aviva’s recommended cash and share offer for Direct Line, a move that could alter the landscape of the British insurance market.
The proposed acquisition, first announced in December 2024, has progressed steadily. Direct Line shareholders gave their decisive approval in March 2025, during a court meeting and general meeting. This endorsement followed the publication of the detailed scheme circular in February 2025.
Recent updates confirm that key regulatory conditions have been met. Both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have issued written notices approving the change of control for a UK authorised person, a key step for the acquisition. Additionally, the Solicitors Regulation Authority (SRA) has given its blessing to Aviva’s acquisition of a material interest in DLG Legal Services Limited, a Direct Line subsidiary.
A notable development in the regulatory journey involves the Competition and Markets Authority (CMA). While CMA clearance was initially a condition for the acquisition, Aviva has opted to waive this requirement. Despite the waiver, Aviva maintains confidence in securing “unconditional clearance by the phase 1 statutory deadline” following “constructive engagement” with the competition watchdog. The CMA’s merger inquiry officially launched on May 14, 2025, with a Phase 1 decision deadline set for July 10, 2025.
With all regulatory and antitrust approvals now either satisfied or waived, the scheme’s finalisation rests predominantly on the upcoming Court Sanction Hearing. The court’s approval, followed by the delivery of a copy of the Court Order to the Registrar of Companies, will mark the scheme’s effectiveness.
The updated timetable indicates that the scheme is also expected to become effective on July 1, 2025, immediately following the sanction hearing. Direct Line shares are slated to cease trading by 7:30am on July 2, 2025, with their listing on the official list and trading on the London Stock Exchange set to be cancelled by 8:00 am on July 3, 2025. Concurrently, new Aviva shares are expected to be issued to Direct Line shareholders by 8:00am on July 3, 2025, with dealings in these new shares commencing at the same time.
The acquisition is poised to make Aviva the largest motor insurer in the UK, significantly increasing its market share in both motor and home insurance. Analysts have pointed to potential annual cost synergies and enhanced cross-selling opportunities through Aviva’s existing platforms.
What are your thoughts on this acquisition? Share your insights below.
