As expected, Aviva, Britain's largest insurer, is acquiring AmerUs Group for $2.9 billion. The two companies companies confirmed they were in talks last Friday.

Aviva is funding the deal by issuing $1.6 billion worth of shares, paying the balance with cash and debt. The company's market capitalization is approximately $35 billion.

Earlier, analysts estimated AmerUs' value at about $2.3 billion. It is the nation's No. 1 provider of fixed indexed life insurance and one of the top five providers of fixed indexed annuities, with assets totaling $24.7 billion.

Aviva has long wanted to establish a footprint in the United States and made a bid for Prudential in March but then withdrew it.

They walked away from Prudential already, so there was "a little bit of pressure on them to complete this deal," Fox-Pitt, Kelton analyst Mikir Shah told Reuters.

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