The European Union's competition watchdog will rule by 13 March whether to clear British insurer Aviva's proposed £5.6bn takeover of rival Friends Life.

The companies sought EU approval last week, the European Commission said on 9 February.

EU antitrust regulators can either clear the deal unconditionally or could demand concessions if they have concerns that the merged entity could lead to higher prices.

Analysts have said new EU insurance rules designed to improve the safety of products for consumers could prompt more deals in the pension industry.

Insurance behemoth

Aviva and Friends Life's boards have agreed the terms of their recommended all-share merger, creating a market leader with 16 million life insurance customers.

Aviva said last month that holders of Friends Life shares will receive 0.74 new Aviva shares, valuing the deal at £5.6bn ($8.5bn, €7.5bn).

Friends Life shareholders will also receive a second interim dividend of 24.1 pence per share.

Aviva also said it proposes to pay a final dividend of 12.25 pence for 2014, a 30% increase over the previous year.

Aviva said the merged company is expected to generate £600m in excess cash flow a year and about £225m in annual cost savings by the end of 2017.

The firms confirmed details of the merger on 2 December, a little over a week after disclosing that they were in advanced talks about creating the UK's largest insurance and savings business.