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23 Nov 2020 | 07:22

Aviva sells Italian life joint venture stake for €400m

(Sharecast News) - Aviva has agreed to sell its 80% stake in its Italian life insurance joint venture to its partner UBI Banca for €400m (£356m) in cash as the insurer continues to reduce its international operations. The FTSE 100 company said the sale of the Aviva Vita holding valued it at 8.4 times 2019 IFRS pretax profit and one time Solvency II own funds at the end of June. A subordinated loan of €40m from Aviva to Aviva Vita will also be repaid when the deal completes.

Under new Chief Executive Amanda Blanc, Aviva is reducing its exposure to Asia and Europe to focus on the UK, Ireland and Canada. The company said it was reviewing its three other Italian businesses to maximise shareholder value.

Aviva said the proceeds would be used to strengthen the company's liquidity and be part of its general capital management and debt reduction goals. The deal follows the sale of Aviva's majority sale of its Singapore business, announced in September.

Blanc said: "The sale of Aviva Vita is another important step forward as we reshape our portfolio. We will continue to be decisive as we seek to transform Aviva for the benefit of our shareholders."

The sale will increase Aviva's net asset value by £0.1bn, strengthen the company's Solvency II capital surplus by £0.2bn and increase its coverage ratio by about 4 percentage points. Aviva Vita's gross assets were £16.3bn at the end of June.
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