- Aviva
- 22 January 2025 09:31:43
Source: Sharecast
"We think this deal is likely to be approved by DLG shareholders due to the attractive valuation offered and is unlikely to cause regulatory concerns due to the competitive nature of the UK personal lines market," JPM said.
"We expect the deal to be positive and upgrade Aviva to OW."
JPM said the deal is strongly accretive, moves Aviva to a higher-multiple non-life insurance mix and improves its scale in UK P&C.
"Beyond our forecasts there is huge scope for revenue synergies, given Aviva will be the second largest financial services brand in the UK with an established ability to cross-sell," it said.
JPM lifted it earnings per share estimates by around 10-12% over 27E-28E and noted "huge" upside to consensus EPS.
It pointed out that Aviva trades at circa 8.3x estimated 2026 price-to-earnings, versus UK life peers at around 9x and European composites on circa 10x.
"If the deal does not go through, this may be taken negatively initially but it would leave Aviva in a position to deploy surplus capital elsewhere or increase capital return to offset this," JPM said.
At 0930 GMT, the shares were up 3.6% at 511.67p.