Aviva abandons Prudential merger

Aviva ppl in the United Kingdom has withdrawn its $17-billion (US$29.6-billion) proposal to merge with Prudential ppl, Aviva confirmed in a brief statement on its Web site.
Aviva’s all-share proposal was rejected by the Prudential board last week, despite Aviva’s offering a premium to the current share price.
Following the Prudential board’s rejection of the proposal, Aviva was reported to have sought support directly from Prudential shareholders. Aviva has stated that any formal bid would only be made if the Prudential board recommends it.
“The rationale for the acquisition relies on combining the geographic strengths of the two companies,” Fitch ratings service noted of the merger implications in a press release. “Aviva has a very strong position in Europe, while Prudential has very strong positions in the U.S.A. and Asia.”
Now that the bid has been withdrawn, speculation is rife about what might happen next. Citing anonymous sources, the Financial Times online suggested Axa, the French insurer, and American International Group, the world’s largest insurer by value, “were seen as possible bidders for either of the two British companies [Aviva or Prudential].”