Aviva Plc has announced that it has reached an agreement with Direct Line Group on the terms of its recommended cash and share offer for the business. The deal values Direct Line at approximately £3.7bn.

Dame Amanda Blanc (pictured), group chief executive officer of Aviva, said: “This deal is excellent news for the customers and shareholders of Aviva and Direct Line. It builds on our track record of delivering four years of strong financial performance and, in line with our strategy, it accelerates our growth in capital light business.

“Aviva and Direct Line share a deep commitment to excellence in looking after customers, and this will remain a top priority following the acquisition. The financial strength and scale of the combined group means customers will benefit from competitive pricing, an enhanced claims experience and even better service.”

Adam Winslow, chief executive officer of Direct Line, added: “Direct Line is an excellent business, home to many well-loved insurance brands, and this year we have made fast progress on our turnaround strategy. Bringing Direct Line and Aviva together offers the opportunity to create a strengthened and enlarged business, with both organisations sharing a deep passion for serving customers and for supporting their people.

“In a highly competitive UK general insurance marketplace, the combined entity will be very well placed to deliver for its customers. I am proud of what Direct Line has achieved to date, and this offer will enable the business to continue to succeed as part of a combined group with Aviva."