25th Sep 2023 10:35
(Alliance News) - Aviva PLC is returning to the "acquisition trail" with its AIG Life purchase, after Chief Executive Amanda Blanc spent the past three years selling off parts of the company in order to refocus it on its core markets of the UK, Ireland and Canada.
"Aviva is back on the acquisition trail following several years of asset sales. Apart from buying Succession Wealth last year, Aviva's strategy has principally been one of streamlining, shaking off non-core activities so it can be leaner and meaner in the pursuit of growth," said AJ Bell's Russ Mould.
On Monday, the London-based insurer said it bought AIG Life from Corebridge Financial, a subsidiary of American International Group Inc, for GBP460 million.
Aviva said AIG Life UK provides a full suite of individual and group protection products, with 1.3 million individual protection customers and 1.4 million group protection members.
Aviva expects the acquisition to close in the first half of 2024. The company said it anticipates accelerated growth in the "attractive" UK protection market.
"This acquisition brings significant strategic and financial benefits to Aviva. It strengthens our prospects in the highly attractive UK protection market and continues our progress in repositioning the group towards capital-light growth," said CEO Blanc.
Mould commented: "Blanc received a lot of credit for helping Aviva to become more focused, so the pressure is on for her to show that acquisitions are being done for the right reasons, and not a repeat of the past which led to a bloated business."
Other than with Succession Wealth, Aviva has sold more than bought in recent years.
In March 2022, Aviva said it would acquire independent financial advice firm Succession Wealth for GBP385 million. At the time, it said the transaction would enhance its presence in the UK wealth market as more people seek advice for their retirement and savings options.
Blanc has been CEO of Aviva since July 2020 and since then, Aviva has sold some of its businesses to refocus the firm on the UK, Ireland and Canada and simplify the firm.
Notably, in February 2021, it sold its French business to Aema Groupe for EUR3.2 billion.
A month later, Aviva sold its general insurance business in Italy to Germany's Allianz SE for EUR330 million and life insurance business to French insurance firm CNP Assurances for EUR543 million. That same month, it sold its Aviva Poland unit for EUR2.5 billion in cash to German peer Allianz.
Most recently, earlier in September, Aviva agreed to sell its quarter ownership of Singapore Life to fellow shareholder Sumitomo Life Insurance Co for a total of SGD1.4 billion, about GBP800 million.
Aviva shares were 0.9% lower at 394.80 pence each on Monday morning in London. Over the past 12 months, the stock is down 4.8%.
By Sophie Rose, Alliance News reporter
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