Resolution

Resolution says it will go ahead with a £2bn rights issue later this month even if the Axa deal falls through as the proceeds can be used to fund other acquisitions.

Industry commentators say Aviva could set its sights on arch-rival Prudential, which is still recovering from its failed $20bn takeover of AIG's Asian business.

Resolution Group, the consolidation vehicle which bought Friends Provident last year, is in talks to buy AXA UK's annuity, protection and group pensions business for £2.75bn.

Prudential's largest shareholder, the Capital Group, is eying a potential break-up of the insurer as a radical alternative to its $35.5bn AIA acquisition.

South African banking group Investec will join the ranks of the largest companies in the London market when it replaces Resolution in the FTSE 100.

Aegon UK, the Edinburgh-based life and pensions business, is thought to be in the sights of Clive Cowdery, who heads the Resolution acquisitions vehicle.

Sales at Resolution, owner of Friends Provident, have fallen 28% so far this year.

The FTSE 100 kicked off the fourth quarter on a positive note in early trading, though shares dipped slightly towards mid-morning.

The FTSE 100 is down slightly in late morning trading despite receiving an initial boost on news Friends Provident has agreed a takeover by Clive Cowdery's Resolution.

Friends Provident's board has recommended shareholders accept the latest acquisition offer from Resolution.