26th Mar 2021 08:49
(Alliance News) - UK insurer Aviva PLC on Friday said it sold its Aviva Poland unit for EUR2.5 billion in cash to German peer Allianz SE, shedding the last of its non-core operations.
London-based Aviva, which provides savings, retirement and life insurance products, said it will now focus on its "strongest businesses" in the UK, Ireland and Canada where it has "leading market positions" and strong growth potential.
For Munich-based Allianz, the acquisition makes it the fifth largest insurer in Poland, doubling its revenue there. Allianz said it also is set to become the second largest insurer in central and eastern Europe in terms of operating profit.
"We are delighted to further strengthen visibility of the Allianz brand in Central Eastern Europe and pursue our successful growth strategy in the region," commented Allianz Chief Executive Officer Oliver Bate. "By combining our insurance and digital expertise and strong investments in technological innovation, customers will benefit from our innovative products and outstanding services."
The deal values Aviva Poland at EUR2.7 billion in total, from which was subtracted a EUR200 million dividend payment.
The business comprises Aviva's interests in life insurance business in Poland and Lithuania and its Polish general insurance, asset management and pensions businesses. It also includes Aviva's 51% shareholding in life and general insurance joint ventures with Spain's Banco Santander SA. These are Santander Aviva TUnZ and Santander Aviva TU, respectively.
Aviva Poland generated GBP130 million in IFRS profit after tax in 2020. It had an IFRS net asset value of GBP400 million on December 31, meaning a GBP1.8 billion uplift in value from the sale price, Aviva said.
Aviva said the proceeds of the sale will raise its Solvency II cover ratio by 13 percentage points.
The sale of Aviva Poland is the eighth divestment Aviva has announced in the past eight months under the streamlining strategy of Chief Executive Officer Amanda Blanc, and Aviva said the deal successfully concludes the planned refocus of the company's portfolio.
Blanc became CEO in July, having joined the Aviva board in January 2020. She is the former CEO of EMEA & Global Banking Partnerships at Zurich Insurance Group AG.
Blanc said on Friday: "The sale of our Polish business is an excellent conclusion to the refocusing of our portfolio announced just eight months ago. The sale of our eight non-core businesses will generate total cash proceeds of GBP7.5 billion. We have made significant progress with our debt reduction plan and in due course we will make a substantial return of capital to shareholders. Our strategic focus is now on our strongest businesses in the UK, Ireland and Canada where we have leading market positions and strong growth potential."
Aviva shares were up 1.0% at 404.00 pence early Friday in London. Allianz shares were up 1.0% at EUR214.50 in Frankfurt.
By Tom Waite; [email protected]
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