Aviva anticipates that its proposed £5.6bn ($8.8bn) takeover of Friends Life may result in approximately 1,500 jobs being cut by the end of 2017.

Aviva said it will engage and consult with employees and their representative bodies in accordance with its legal obligations once more detailed consideration has been undertaken which will provide a more informed view of the areas and teams that may be potentially impacted.

At this stage, no specific teams, roles or locations have been identified, said Aviva.

The possible job cuts are part of Aviva’s plans to generate £225m of cost savings by the end of 2017 and would come from the headcount of the enlarged Aviva Group of approximately 31,500.

Aviva added that it has given assurances to the Friends Life Directors that the existing contractual and statutory employment rights, including pension rights, of all retained management and employees of Friends Life will be fully respected following completion of the proposed acquisition and that any changes that are proposed will be subject to appropriate consultation.

Shareholders will be able to vote on the proposed acquisition on 26 March 2015.

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The possible job cuts come after it was announced in early December 2014 that agreement had been reached on the terms of Aviva’s proposed £5.6bn ($8.8bn ) takeover of Friends Life.

Aviva has said the proposed acquisition would combine Aviva’s brand, broad product range, scale and composite benefits with Friends Life’s strong cash flow, corporate pensions leadership, balance sheet strength and proven back book expertise.

The proposed acquisition is expected to result in Aviva having leadership positions across key product areas, with a total of approximately 12m UK life customers, prior to the deduction of overlapping customers), with combined UK life assets under management of £215bn.

Overall, Aviva said the enlarged Enlarged Aviva Group’s UK Life platform is expected to result in:

  • the UK’s largest back book with the scale to achieve improved efficiencies when coupled with Friends Life’s management team with a track record of back book value creation
  • a leadership position in corporate pensions with assets under administration of £39bn
  • a significant increase in protection value of new business, with complementary product mix and distribution focus and potential efficiencies through the alignment of new business platforms; and
  • an increased opportunity in the at-retirement market, with the enlarged Aviva Group representing one in four retiring defined contribution pension customers and accessing £4bn of annual maturing pensions.