Aviva PLC’s unsolicited offer for the U.K. Prudential PLC (not the New Jersey Pru) may be taking place across the pond, but it’s a pretty good bet that it will start causing some waves (or ripples) on this side of the Atlantic.

At the very least it’s not hard to imagine that the developing situation will be of keen interest to a lot of folks headquartered in Lansing, Mich.

Whatever the ultimate outcome between Aviva and Prudential, one thing that is sure to happen is the buzz that starts almost immediately anytime a merger agreement is announced or an unsolicited offer is put forth. In two words that buzz is: Who’s next?

This is a natural question for many of the constituencies that keep their eye on the industry and the players therein. You’ve got the investment bankers, analysts and the financial media, to name a few.

Investment banks have a big stake in the ‘who’s next’ buzz. Their fees depend in large part on somebody being next and, even more so, on that entity that is next being the one they are advising. Onlookers in the investment banking game tend not to stay in the game all that long. So, it’s no wonder that investment bankers’ mantra is “let’s make a deal.”

Analysts may not have the same stake in fees as investment bankers, but they love to speculate–just like the rest of us, only more.

And the financial media? We always want something new to report, something new to offer readers. It’s kind of like “throw another shrimp on the barbie.” We can never get enough.

It’s interesting in this case how Prudential now is being pursued, when only a few short years ago it was the pursuer. I’m thinking, of course, of Prudential’s abortive offer for American General, which went nowhere when AIG entered with its bid that Pru couldn’t muster up the nerve and/or the wherewithal to meet.

It’s almost ironic that the same thing could conceivably happen to Prudential now that it is in play itself. Other possible suitors that have been mentioned are AXA, AIG, Zurich and AEGON. None of them would comment, of course. Then again, Aviva may not lose its nerve or tenacity, depending on how much it really wants Prudential.

I can’t help but think that one of the reasons for Prudential’s attractiveness to Aviva, which does relatively little business in the U.S., is the fact that Prudential is the parent of Jackson National Life Insurance Company.

That acquisition was a really smart move on Pru’s part when it happened some years back because Jackson National Life is doing very nicely.

Looking at the 2005 year-end variable annuity sales figures from VARDS, which we ran in the March 13 issue, shows that Jackson ranked 12th at year-end, up from 14th place the year before. Its Perspective II Fixed and Variable Annuity was the industry’s fourth biggest-selling product and the company’s VA assets rose an impressive 31.8% in 2005 to $18.2 billion (the most percentage-wise of any company in the Top 25).

It’s got a big distribution network and does quite a bit of business in banks. In short, Aviva probably sees a nice toehold in the U.S. with Jackson being the toe.

Time will tell, of course, what eventually happens between Pru and Aviva. In the meantime expect all kinds of buzz about how the European market is not only going to consolidate but also how that consolidation is what the market absolutely, positively needs.

Steve Piontek

Editor-in-Chief