Shareholders in Friends Life are being offered 394p per share – roughly 8 per cent more than what they are currently worth – if they support the deal.

They would own about 26 per cent of the enlarged group.

Following the acquisition, Andy Briggs, the current group chief executive of Friends Life, will become chief executive of Aviva UK Life and will join the board of Aviva as an executive director.

Sir Malcolm Williamson, the current chairman of Friends Life, will join the board of Aviva as senior independent director, with a further as yet unnamed non-executive director of Friends Life joining the board of Aviva.

The industry reacted with confusion and concern to Aviva’s intention to takeover smaller rival Friends Life – announced on 21 November – with fears a merged insurer will mean worse customer service and less competition.

Aviva announced on 28 November it is being forced to pay compensation to tens of thousands of investors in one of its funds who were erroneously led to believe their capital was protected.

The group is to pay about 40,000 investors in the Aviva Deposit fund an average of just over £55, meaning the company is set to pay out some £2.2m.