Aviva plc announces the sale of Friends Provident International Limited (“FPIL”) to RL360 Holding Company Limited, a subsidiary of International Financial Group Limited, for a total consideration of £340m*.
Following a strategic review of FPIL, Aviva has concluded that the business is not central to the group’s strategy to focus on a small number of markets where it has scale and profitability or a distinct competitive advantage. The sale of FPIL will allow Aviva to further reallocate capital to businesses that can achieve leading market positions and deliver superior returns.
The consideration represents a multiple of 3.2x FPIL’s 2016 net asset value. The transaction will result in an increase of approximately £100m in Aviva’s Solvency II capital surplus. The transaction will also create an IFRS loss on disposal of approximately £130m, which is primarily due to the intangible assets held on Aviva’s balance sheet arising from Aviva’s acquisition of FPIL in 2015.
In 2016, FPIL made a post-tax loss of £2m and did not remit any cash to Aviva Group. As a result, a disposal of FPIL is expected to be positive to Aviva’s cash dividend paying capacity.
FPIL will continue to serve customers, partners and intermediaries as usual and there is no change to customers’ policies as a result of today’s announcement.
The transaction is subject to customary regulatory approvals and is expected to complete in early 2018.
Chris Wei, Executive Chairman, Aviva Asia & FPIL, said:
“The sale of Friends Provident International Limited is a good outcome for Aviva. It allows us to focus on the significant opportunities we have to grow Aviva’s business across Asia through digital and disrupting the traditional insurance industry.”
Nigel Prideaux +44 (0)20 7662 0215
Andrew Reid +44 (0)20 7662 3131
Chris Esson +44 (0)20 7662 8115
Diane Michelberger +44 (0)20 7662 0911
* Total consideration comprises £310m in cash receivable on completion and £30m in deferred consideration in the form of preference shares in International Financial Group Limited, the owner of RL360 Holding Company Limited
Notes to editors:
- Friends Provident International provides life assurance and investment products in Asia, the Middle East and other selected markets. It has offices in Hong Kong, Singapore, the United Arab Emirates and the Isle of Man.
- Aviva provides life insurance, general insurance, health insurance and asset management to 33 million customers.
- In the UK we are the leading insurer serving one in every four households and have strong businesses in selected markets in Europe, Asia and Canada. Our shares are listed on the London Stock Exchange and we are a member of the FTSE100 index.
- Aviva’s asset management business, Aviva Investors, provides asset management services to both Aviva and external clients, and currently manages over £340 billion in assets. Total group assets under management at Aviva group are £450 billion.
- Aviva helps people save for the future and manage the risks of everyday life; we paid out £34.4 billion in benefits and claims in 2016.
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