UK insurance giant Aviva has this morning announced that it is offloading its entire shareholding in two Spanish businesses.
The firm will sell Cajamurcia Vida and Caja Granada Vida, its life insurance and pensions joint ventures, to Bankia for a total consideration of 202 million euros (around £178 million).
In a release, Aviva highlighted that the consideration represents 2.1 times Aviva’s share of the IFRS net asset value and 22.5 times Aviva’s share of earnings after tax of these businesses. It will lead to an increase of around £150 million in Aviva’s Solvency II capital surplus.
The move follows a restructure of the Spanish banking system which has led to consolidation among Aviva’s banking partners. Following this move, Aviva sold its shareholdings in joint ventures with Bankia in 2012 and with Novacaixagalicia Grupo in 2014. Last year, it sold the majority of its remaining business to Santalucia. The combined proceeds of these various sales are thought to reach around £1.3 billion.
“This sale is a strong return for our shareholders,” commented Mark Wilson, group CEO of Aviva. “It means that over the past five years we have generated proceeds of £1.3 billion from selling almost all of our Spanish operations. The transaction further simplifies Aviva, strengthens our already healthy capital position and is another example of our focus on attractive, growing markets where we have high quality franchises.”
The transaction remains subject to regulatory approval.