Thousands of small investors are set to play a pivotal role in deciding whether Norwich Union proceeds with its £18bn mega-merger with CGU.

More than 400,000 Norwich Union policyholders have held on to their shares since the insurer de-mutualised three years ago.

Representing around 41% of Norwich Union's total 1.2 million shareholders they are a formidable block, and many will be scrutinising the supposed benefits of the merger very closely.

Norwich Union has sent out an information pack to shareholders in which it spells out the exact details of its proposed tie-in with CGU in terms of cost savings and increased dividends.

Norwich Union has called a special meeting for shareholders at Wembly Conference Centre on March 31.

CGU shareholders will get to vote on the deal the same day at The Old Brewery, in Chiswell Street, London. Postal votes are possible but must be sent before March 28.

To be approved the Norwich Union vote must be carried by 50% of voting shareholders, with the qualification that they must represent 75% of the value of shares held.

If the vote is carried Norwich Union shareholders will receive 48 shares in the new company, CGNU, for every 100 original shares.