Nearly 32,000 staff at Aviva (AV.L) are to receive £500 of free shares each after the insurance giant completed its £3.7 billion takeover of rival Direct Line (DLG.L).

The group said all 23,000 staff at Aviva and the 8,500-strong workforce at newly acquired Direct Line will receive the shares bonus in September to celebrate and recognise the milestone deal.

They will need to hold on to the free shares for three years, Aviva said.

Aviva officially completed the acquisition on Wednesday after receiving confirmation of the all-clear from the Competition and Markets Authority (CMA) on Tuesday.

The takeover, which was first announced on December 23 last year, creates a significant force in the motor insurance sector, estimated to cover more than a fifth of the total UK market.

Direct Line owns the Churchill and Green Flag brands, as well as its namesake brand as part of a portfolio offering car, pet, home and other insurance policies.

Amanda Blanc, group chief executive at Aviva, said: “The completion of the acquisition of Direct Line brings together some of the country’s best-known and admired insurance brands and brilliant people to better serve the needs of now 20 million UK customers.”

She said the deal “puts us in a very good position to deliver strong returns for shareholders” and supports its strategy.

“That is why this deal made such sense for us and we are excited at the further opportunities this creates for Aviva’s growth,” she added.

But the takeover has also sparked fears among workers at the two firms after Aviva revealed at the end of last year that around 2,300 jobs would be at risk amid cost-cutting efforts in the wake of the deal.

Aviva is looking to save £125 million in annual costs within three years of the deal closing.

Aviva paid 129.7 pence in cash and 0.2867 of its own shares for each Direct Line share as part of the deal.

It also paid up to 5p in dividend payments per share to Direct Line shareholders.

Aviva shareholders own around 87.5% of the new company while Direct Line shareholders own about 12.5%.

Before the Aviva deal was agreed, Direct Line had fended off a takeover attempt by Belgian company Ageas earlier in 2024.

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