This was third bid submitted, with two earlier offers - last week and earlier this week - rejected as 'substantially' under value.
However, in today's joint statement, the Direct Line board said it would recommend to shareholders that they accept a formal offer from Aviva and that the takeover would provide 'opportunity to deliver significant synergies creating substantial additional value for both sets of shareholders'.
Aviva said it 'believes in the strong strategic and financial logic' of the combination of the firms. On 27th November the insurer issued a statement in response to press speculation about the potential takeover, noting:
"Aviva believes that an acquisition of Direct Line would be consistent with its strategy to accelerate growth in its UK businesses and further pivot the group towards capital-light business lines. The acquisition would expand Aviva's presence in the attractive UK Personal Lines market, building on its existing strength, and creating a more efficient platform from which to serve existing and new customers. In addition, the acquisition would allow Direct Line customers to benefit from Aviva's breadth, scale and financial strength."
Aviva now has until 25th December to table a firm offer.
