The proposed merger between CGU and Norwich Union could face a counter bid with AXA and Aegon tipped...
The proposed merger between CGU and Norwich Union could face a counter bid with AXA and Aegon tipped as likely challengers.
AXA is weighing up the options of breaking up the proposed CGNU group and looks set to make a counter bid for Norwich Union.
Aegon looks likely to put an offer in for the combined CGNU should the merger go ahead.
The group has grown at a significant pace and has a well-established acquisition strategy. It has a strong interest in life and pensions activity
The four fundamentals of Aegon's strategy are a strong focus on life an pensions business, adhering to a decentralised organisation, prospects for international growth and a focus on profitability rather than revenue growth.
The proposed CGNU deal also calls into question the future of the groups' protection ranges. The combined group would be the UK's largest insurance company, but until the merger is finalised both life offices are adopting a 'business as usual' approach.
Norwich Union has three long term care contracts, including Future Assured, Immediate Care and a care bond.
CGU has recently revamped its LTC range to offer a pre-funded and an immediate needs product. Both groups also have critical illness products as well income protection cover.
Ian Frater, head of media relations at CGU, said: "There is absolutely no information on product details and implications for product ranges or policyholders. Assuming that all goes well, we expect the merger to be formally signed around June 2000. When that happens, we will be outlining the strategy for our future.
"However, it has been decided that in the UK we will be trading under the Norwich Union name as it has more value.
"From June, the CGU name will effectively cease to exist in the UK market."
