Although sold as a merger, owners of Scottish Provident, Resolution, have effectively agreed to takeover Friends Provident. Resolution has about £1bn of cash it wants to invest. Friends need capital to fund its expansion plans. Because Resolution has the capital, its management will have the upper hand in the new company to be called Friends Financial.
The plans have yet to receive regulatory and shareholder approval. Although the deal is described as "complementary", the companies have identified £100m of cost savings by 2010, which probably means substantial job losses and office closures.
Life insurance: News update: July 2007
