Aviva strikes deal to buy Direct Line, AstraZeneca gets EU approval for lung cancer treatment

London open

The FTSE 100 is expected to open seven points lower on Monday, having closed down 0.26% on Friday at 8,084.61.

Stocks to watch

Aviva said it had struck a deal to buy insurance rival Direct Line for £3.75bn. The offer values each Direct Line share at 275p a premium of 73.3% to the closing Price of 158.7p on November 27. Aviva plans to achieve annual pre-tax cost savings of at least £125m through job cuts “economies of scale and increased efficiency”.

AstraZeneca’s lung cancer treatment Tagrisso has been approved by European Union regulators on the back of “powerful results” from a phase III trial. Tagrisso, otherwise known as osimertinib, will now be administered for adults with unresectable, EGFR-mutated non-small cell lung cancer, after reducing the risk of disease progression or death by an unprecedented 84% compared with a placebo in the trial.

Frasers Group responded to the outcome of Boohoo Group’s 20 December shareholder vote on Friday, in which its desire to install Mike Ashley to the board was rejected. The FTSE 250 retailer said it respected the views of independent shareholders, adding that in response to Boohoo's invitation to propose an alternative board candidate, it planned to nominate a “highly qualified individual”. It said it expected Boohoo's board to honour its commitment to consider the nomination without delay.

Newspaper round-up

British firms are predicting a sharp fall in business activity in the new year, in the latest economic snapshot to warn of an increasingly gloomy outlook for the UK in 2025. The growth indicator survey from the Confederation of British Industry (CBI) indicates firms are preparing to cut down on hiring and reduce output over the next three months. – Guardian

Many exporters are still struggling with post-Brexit trading rules, the British Chambers of Commerce (BCC) has said, as it urges the government to press ahead with an EU “reset” in the new year. In a survey of more than 1,000 of its member companies, the BCC found just 15% said the trade and cooperation agreement (TCA) with the EU, signed by Boris Johnson on Christmas Eve 2020, had helped them to grow sales with the EU. – Guardian

Donald Trump has threatened to retake control of the Panama Canal unless “rip-off” transit fees are reduced for US ships. In social media posts, the president-elect said the 51-mile waterway was vital to America’s economic and security interests but was being run in a “very unfair and injudicious way”. – Telegraph

Sir Chris Hohn, the billionaire hedge fund manager, awarded himself a £42 million dividend this year — down dramatically from the £275 million he collected in 2023 as TCI Fund Management made charitable donations of £340 million. Hohn, 58, received the $53 million payout in the year to the end of March, according to accounts filed at Companies House. – The Times

A former adviser to a UK prime minister has been accused of involvement in a $250 million bribery case. The British executive is described as a co-conspirator in the US Department of Justice’s prosecution of Gautam Adani, one of the richest men in Asia. Adani, an Indian billionaire and founder of the multinational conglomerate Adani Group, was charged in November by a New York court for his role in an alleged conspiracy to bribe Indian officials to win valuable energy contracts. – The Times

US close

Wall Street stocks closed higher on Friday as the blue-chip clawed back some of this week's heavy losses.

At the close, the Dow Jones Industrial Average was up 1.18% at 42,840.26, while the S&P 500 advanced 1.09% to 5,930.85 and the Nasdaq Composite saw out the session 1.03% firmer at 19,572.60.

The Dow closed 498.02 points higher on Friday, building on modest gains recorded in the previous session.

Friday's primary focus was November's personal consumption expenditures index, which revealed Americans continued to spend at a steady clip last month, while prices rose slightly less than anticipated.

According to the Department of Commerce, in seasonally adjusted terms, personal incomes rose at a month-on-month clip of 0.3% during November, while personal spending increased by 0.4%.