UK competition regulator opens inquiry of Aviva buy of Direct Line

The UK competition regulator on Wednesday opened a probe into the acquisition of Direct Line Insurance Group PLC by larger peer Aviva PLC

The motor and home insurer accepted a £3.7 billion cash-and-shares takeover offer from Aviva back in December. Both companies are based in London.

Direct Line shareholders will receive 0.2867 of an Aviva share, 129.7p in cash, and up to 5p in dividends payments for each Direct Line share held.

Because of the share element, Direct Line shareholders will hold 12.5% of the enlarged group.

At the time, the offer valued each Direct Line share at 275 pence. Direct Line shares were down 0.3% to 288.20p early Wednesday in London.

Aviva shares were down 0.4% to 571.40p on Wednesday but are up 21% so far in 2025, so the value of the share component of the offer has risen.

Direct Line shareholders voted in favour of the deal back in March.

The Competition & Markets Authority on Wednesday said it is considering whether the merger of insurance rivals ‘may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services’.

It has invited comments on that question, with a deadline for this of May 29. The CMA must make its phase 1 inquiry decision by July 10.

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