Resolution has bought Axa's UK protection business as part of a deal for the whole of its Life organisation worth £2.75bn.
The owner of Friends' Provident will acquire Axa's traditional life and pensions book and group pension business, alongside the IFA protection arm.
The total purchase is part-funded by a rights issue of approximately £2.05bn, and comprises £2.25bn in cash and up to £500m in deferred consideration notes to be issued by Axa, with investors agreeing to sub-underwrite 52% of the cash call.
It will be financed by a rights issue of approximately £2.05bn, with the remaining amount coming from a fund acquisition finance facility.
The AXA UK life business will be acquired and held by Friends Provident Holdings (UK) Ltd, a transaction which Resolution says, "is a logical next step in our consolidation strategy in the UK life and asset management sectors."
"Combined with the Friends Provident business acquired in November 2009, the deal today creates a platform with a wide range of options for future consolidation," it adds.
Also as part of this acquisition, around 2,200 AXA employees will transfer across to Friends Provident Holdings (UK) Limited, and upon integration of the two businesses, Friends Provident will be renamed Friends Life.
This is expected to happen in early 2011.
Axa Life CEO Paul Evans will become Axa UK deputy chief executive, while Axa Wealth chief executive Mike Kellard will join the Axa UK board.
Axa UK says the decision to accept Resolution's approach follows its intention to increase its focus on "RDR-ready" Axa Wealth, in an "acceleration of its new model strategy".
Trevor Matthews, CEO Friends Provident is confident the "landmark deal" will provide a stronger overall business.
"There is a good operational fit between both organisations," he says.
"Bringing them together will make us one of the market leaders in our core businesses of protection and corporate pensions in the UK.
"This combined group will have a substantial offering in protection and corporate pensions products, and a real opportunity to deliver cost efficiencies allowing us to compete more effectively.
"We are excited by the continued prospects for our business as the driving force in Resolution's consolidation strategy for open businesses in the life sector.
"We look forward to combining our capabilities with those of AXA's UK life business and creating a model entity for the future," he adds.
