Aviva rejects £5bn approach from RSA

Aviva rejected as "unacceptable" a £5bn cash approach from RSA to acquire its general insurance business yesterday, as a war of words broke out between the rival insurers.

RSA hit back, saying said the proposal to acquire Aviva's UK, Canadian and Irish general insurance operations would be in the "interests of both sets of shareholders" and would deliver savings of £300m a year before tax.

RSA said no other major UK insurer now operated both life and non-life insurance businesses, but Aviva said this composite model allowed it to hold less capital. Shares in Aviva fell 2 per cent to 380.43p while RSA's stock dropped 2.8 per cent to 124.7p.