Although talked of as a merger, in reality, life insurer Friends Provident is for sale.
Friends Provident, the FTSE 100 life insurer, looks set to become the focus of a bidding war this summer, with the group having confirmed that it is in talks with its rival Resolution.
Resolution is unlikely to get a clear shot at Friends, with several of its UK competitors - such as Aviva and Standard Life - likely to consider a counter-bid for the group.
AXA, which already owns a 15 per cent stake in Friends, and has openly admitted its ambition to become the second-largest player in the UK's long-term savings market, is also highly likely to consider a bid for the company. The private equity group JC Flowers is another party which is believed to have been mulling a bid for Friends in recent months, and may be tempted to take part in an auction.
A deal between Resolution and Friends would create Britain's fourth largest quoted UK life company, overtaking Standard Life and leaving the merged entity only slightly smaller than third-placed Legal & General.
Income protection: News update: July 2007