The European Commission yesterday approved a deal to give insurance giant Aviva a 75 per cent share of Ark Life, the life assurance company currently owned entirely by AIB.

AIB and Aviva's Irish subsidiary Hibernian Life & Pensions both welcomed the European Commission's decision.

The parties say their five-year renewable deal is a joint venture, while the Commission called it an acquisition by Aviva. "The European Commission has cleared ... the proposed acquisition of Ark Life Assurance Co by Aviva," the Commission said in a statement.

It added that the deal did "not significantly impede effective competition in the (European Economic Area) or any substantial part of it."

AIB will get a cash payment of up to €204 million and retain a 24 per cent interest in Ark Life through its bankassurance unit.

Hibernian Life & Pensions will take over Ark Life, consolidating its position as the third-largest player in the Republic's long-term savings market. Hibernian is now third and Ark fourth.

The combined entity will have a market share of around 19 per cent, compared with Bank of Ireland at 24 per cent and Irish Life at 25 per cent, Aviva executive director Philip Scott said.