Irish Life and Irish Permanent are expected to formally announce today the successful completion of the proposed merger talks between the two companies. Market sources suggest the publicly-quoted companies will inform the Stock Exchange of the deal this morning.

Irish Life chief executive Mr David Went will become the chief executive of the enlarged entity, while Irish Permanent finance director Mr Peter Fitzpatrick will take charge of the finance role in the new company. The deal will be structured as a take-over of Irish Life by the smaller Irish Permanent to get round the 15 per cent protection rule which precludes Irish Permanent being taken over by another institution before November 1999.

It will be completed on terms broadly in line with recent relative market capitalisations of both companies.

Irish Life is valued at around £1.6 billion by the stock market while Irish Permanent is valued at around £800 million.

The merger will have to be formally approved by shareholders of both companies.

Irish Permanent will make a formal bid for Irish Life with its shareholders expected to consider the bid at an extraordinary general meeting in April.

The deal may also be referred to the Competition Authority.

A new holding company will be established bearing the name Irish Life and Permanent through which the new group will operate, with both the Irish Life and Irish Permanent brand names continuing to trade separately for the time being.

A number of working groups have been examining the structures and business mix across both firms over the past month to establish a blueprint for how the merger will work in practice.

Some overlap is inevitable and could result in job losses. Most duplication of functions will occur in their life assurance operations - Irish Life Assurance and Irish Progressive - while there will also be some overlap in underwriting and back office administration.