Aviva Agrees to Buy UK Insurer Direct Line for £3.7 Billion (3)

Aviva Plc agreed to buy Direct Line Insurance Group Plc for roughly £3.7 billion ($4.65 billion) in a deal that would create the UK’s largest motor insurer.

Each Direct Line shareholder will be entitled to receive 0.2867 new Aviva shares, 129.7 pence in cash and as much as 5 pence in dividend, according to a statement on Monday. The transaction would value each Direct Line share at 275 pence apiece, representing a premium of about 73% to the closing price on Nov. 27, when Bloomberg News first reported the takeover interest.

The board of Direct Line considers the terms to ...