UK insurer Aviva to shed up to 2,300 jobs in $4.65-billion deal

British insurer Aviva could cut up to 2,300 jobs as it takes over smaller rival Direct Line in a 3.7 billion pound ($4.65 billion) cash-and-stock deal, the companies said on Monday, creating the UK's largest home and motor insurer.

- Chandini Monnappa & Lawrence White

The deal, which was first announced earlier this month, will see Direct Line shareholders receive 0.2867 new Aviva shares, 129.7 pence in cash and up to 5 pence in the form of a dividend, Aviva said.

The takeover represents Aviva CEO Amanda Blanc's biggest acquisition to date, as she tries to expand in the company's core markets of Britain, Canada and Ireland after selling a series of overseas assets to simplify the business.

The combined company will shed between 5-7% of its total workforce as it eliminates overlapping roles, putting up to 2,300 jobs at risk, with the cuts spread over three years, the companies said.