Upcoming Court Hearing to Determine Fate of Aviva-Direct Line Merger
A critical legal hearing is set for July 1, 2025, to sanction Aviva’s recommended cash and share offer for Direct Line, a move that could significantly alter the UK insurance landscape. The proposed acquisition, first announced in December 2024, has made steady progress through regulatory approvals.
Direct Line shareholders gave their decisive approval in March 2025, following the publication of the detailed scheme circular in February 2025. Key regulatory conditions have been met, with the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) issuing written notices approving the change of control. The Solicitors Regulation Authority (SRA) has also given its approval for Aviva’s acquisition of a material interest in DLG Legal Services Limited, a Direct Line subsidiary.
While the Competition and Markets Authority (CMA) clearance was initially a condition, Aviva has opted to waive this requirement, maintaining confidence in securing “unconditional clearance by the phase 1 statutory deadline” after “constructive engagement” with the competition watchdog. The CMA’s merger inquiry launched on May 14, 2025, with a Phase 1 decision deadline set for July 10, 2025.
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 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.
