The NN Group, which owns insurance giant Nationale-Nederlanden, is taking over sector peer Delta Lloyd in a €2.5bn all cash deal.

In October Delta Lloyd rejected a €5.30 per share offer by NN Group, saying it was not in the interest of its shareholders.

NN Group, which was spun off by ING in 2014, has now raised its offer by 10 cents to €5.40 a share, which Delta Lloyd has accepted.

Between them the two companies have a workforce of 17,000 and the takeover will lead to job losses, broadcaster NOS said. It is not yet clear how many but trade union CNV says it expects up to 1,500 jobs will go.

In total, the merged company expects to realise cost synergies of €150m by 2020.

Delta Lloyd’s chief executive Hans van der Noordaa said in a statement it has become clear that Delta Lloyd will benefit under the NN Group flag.

The insurance sector is coming under increasing pressure due to regulatory changes and competition, he said, adding that ‘after extensive analysis of different alternatives, we made a clear decision that a combination of NN Group and Delta Lloyd is in the long term interest of our stakeholders including our shareholders.’