AVIVA and Friends Life have confirmed they are in advanced talks about a merger deal.
The potential combination would create the UK's leading insurance, savings and asset management business by number of customers.
Friends said it was prepared to recommend the terms of Aviva's offer, which values it at more than £5.5 billion, to its shareholders.
Friends Life was created in 2011 following the amalgamation of Friends Provident, the majority of Axa UK Life and Bupa Health Assurance. The businesses were rebranded to form Friends Life Group, providing pensions, investments and insurance and retirement income products.
The group can trace its roots back to the 1800s as the Sun Life Assurance Society formed in 1810 and Friends Provident, which was formed in Yorkshire in 1832.
The company has more than five million customers, around 4,000 staff worldwide and manages funds worth in excess of £117 billion.
A combination with Aviva, headed by Mark Wilson, creates a business with 16 million UK customers.
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