South African insurer Old Mutual has this week snapped up United Asset Management in a deal worth £970m.

Old Mutual believes that its offer, which has been agreed by both boards, will provide much greater cross selling opportunities.

Under the deal, Old Mutual will buy United Asset shares at a value of $25 each (£16.58).

However, United Asset Management currently has net debts of around £510m, and the offer to the group's shareholders could be reduced if the losses escalate.

Old Mutual chairman and chief executive Mike Levett, said: "We believe that this transaction has considerable benefits for both Old Mutual and for the United Asset Management Group, their clients and professional staff. We expect there to be significant cross selling and distribution of investment products into Old Mutual's client base."

Overall, the acquisition of United Asset Management will increase Old Mutual's assets under management to around £182bn.