- Aviva initially agreed to sell its 25.9% stake in Singlife in September
- It now expects c. £930 million in total proceeds related to the sale
- The company has sold several foreign divisions under CEO Amanda Blanc
Aviva is estimated to receive an additional £80 million from the deal to divest its stake in Singapore Life Holdings (Singlife).
The insurance giant initially agreed in September to sell its 25.9 percent stake in Singlife, as well as two debt instruments, to Japanese company Sumitomo Life for £800 million.
It now expects to receive a total of £930 million in proceeds from the sale after Sumitomo reached a separate agreement to buy asset manager TPG Capital's stake in Singlife.
Sale: Aviva initially agreed in September to sell its 25.9 percent stake in Singlife, alongside two debt instruments, to Japanese company Sumitomo Life for £800 million
Aviva expects to use the additional cash for reinvestment, investor returns or M&A deals when the deal closes, which is expected to happen in the first quarter of next year.
The FTSE 100 company completed the insurance sector's largest ever merger deal in Singapore's history when it sold a 75 per cent stake in Aviva Singapore to a consortium led by Singlife for about £1.8 billion in 2020.
After Aviva agreed to sell its Singlife stake three months ago, CEO Amanda Blanc said the transaction represented a “good outcome” and left the group in “a very strong position to build on our trading momentum”.
Under Blanc, Aviva has sold numerous overseas divisions to help reduce debt, simplify operations and focus on the British, Irish and Canadian markets.
The move also followed pressure from Swedish activist investor Cevian Capital to give more money to shareholders.
Cevian sold its entire stake in Aviva in May after the London-based company returned £5 billion to investors since 2021.
At the sale, a Cevian partner praised Blanc for transforming Aviva from an “underperforming conglomerate into a focused and high-performing insurance company.”
In its latest trading update, Aviva said it expects to beat medium-term financial targets and grow annual operating profit by 5 to 7 percent, despite higher weather-related claims, including from storms Babet and Ciarán in Britain .
In addition, the group announced that general insurance premiums increased to £8 billion in the first nine months of 2023, following robust performance in all three core areas.
In particular, the company has benefited from increased demand for private health insurance in Britain, amid record waiting lists in the NHS and an increase in the number of corporate customers in its corporate pensions business.
Aviva shares were 0.35 percent higher at 432.6p early Wednesday afternoon, but are still down significantly since the start of the Covid-19 pandemic.