8th Jun 2007 07:04
Aviva PLC08 June 2007 News release 8 June 2007 AVIVA AND SABANCI HOLDING ANNOUNCE THE MERGER OF THEIR TURKISH LIFE AND PENSIONS BUSINESSES AND THE ESTABLISHMENT OF A BANCASSURANCE AGREEMENT WITH AKBANK • Merger creates new leading life and pensions company in Turkey • Exclusive long-term bancassurance partnership with Akbank • After five years, total annual pension contributions and life premiumsare expected to exceed £500 million* with total assets under management of £2billion* • Combines the largest life direct sales force with a leadingbancassurance position • Creates the largest pensions provider with 25% market share • Creates the third largest life insurer with 11% market share Aviva plc ("Aviva") and Aksigorta AS ("Aksigorta"), the insurance company of theSabanci Holding Group ("Sabanci") today announce the signing of an agreement tocreate a new leading life and pensions company in Turkey. Under the terms of the agreement Aviva's Turkish life and pensions business,Aviva Hayat ve Emeklilik A.S. ("Aviva HE") will merge with Ak Emeklilik A.S. ("Ak E"), Aksigorta's life and pensions business. The joint venture will enterinto an exclusive long-term bancassurance agreement with Akbank T.A.S. ("Akbank"), Turkey's second largest privately-owned bank. The merger will bring together Aviva HE's direct sales force, which is thelargest in Turkey, and Ak E's leading position in bancassurance. The jointventure will be the largest pensions provider in the market with pensions assetsunder management of £290 million** as at 31 March 2007 and a market share of25%. It will also be the third largest life insurer with gross written premiumsof £15.5 million** for the three months ended 31 March 2007, representing amarket share of 11%. The bancassurance agreement draws upon Akbank's leading market position andAviva's extensive international bancassurance experience and will provide lifeand pension products to Akbank's 5.9 million retail customers through its 687branches. Akbank is the largest company in Turkey by market capitalisation andthe country's most profitable private bank. Aviva and Sabanci have high expectations for the further development of theTurkish life and pensions sector. The combination of low current insurancepenetration rates and the potential for continued economic development areexpected to create attractive opportunities for profitable growth. The jointventure will leverage its multi-channel distribution capabilities, utilising thestrengths of the brand of both groups, to maintain its market-leading positionin pensions and to increase its position in life insurance. Aviva and Sabanci will jointly manage the joint venture through equalshareholdings. Meral Ak Egemen, currently general manager of Ak E, will becomechief executive of the merged business while Carl Boehr, currently chiefexecutive officer of Aviva Turkey, will become executive director, with overallresponsibility for integration. After five years, total annual pensioncontributions and life premiums are expected to exceed £500 million*, with totalassets under management of £2 billion*. In addition to contributing its Turkish life and pensions business to the jointventure, Aviva will make a cash payment of US$100 million (£50 million***) toAksigorta upon completion of the transaction. Tidjane Thiam, group executive director, Aviva Europe, said: "We are creating aunique business in the Turkish life and pensions market. It will be a leader ina rapidly evolving market with outstanding growth potential. The winningcombination of Aviva's strong direct sales team with Akbank's retail strength,Ak Emeklilik's bancassurance experience and Sabanci's local expertise will be apowerful springboard from which to grow the business. "This is an important addition to Aviva's international bancassurance portfolio.We are now the leading provider of life and pensions products in Europe and havebecome a partner of choice for banks across Europe." Akin Kozanoglu, president of Sabanci Financial Services Group and deputychairman of Akbank, said: "On March 21st, when we signed the Memorandum ofUnderstanding, I summarized our view about the potential of this deal as "twoplus two equals five". The joint venture, which is built on the complementarystrengths of Ak E and Aviva HE, will be focusing on smart growth. It is ourintention to be the driving force of growth and innovation in this market." The transaction is subject to regulatory approval and is expected to complete inthe fourth quarter of 2007. -ends- Enquiries: MediaHayley Stimpson, director of external affairs +44 (0)20 7662 7544Sue Winston, head of group media relations +44 (0)20 7662 8221 AnalystsCharles Barrows, investor relations director +44 (0)20 7662 8115Amanda Wilbraham, investor relations senior manager +44 (0)20 7662 2111 * Converted at 2.64 YTL/GBP** Converted at 2.70 YTL/GBP***converted at 1.99 USD/GBP Notes to editors: Aviva - Aviva is the leading provider of life and pensions products in Europewith substantial positions in other markets around the world, making it theworld's fifth largest insurance group based on gross worldwide premiums at 31December 2005. - Aviva's principal business activities are long-term savings, fundmanagement and general insurance, with worldwide total sales of £41.5 billionand assets under management of £364 billion at 31 December 2006. - Aviva's Turkish life and pensions business, Aviva HE, had pensionassets under management of £106 million at 31 December 2006 and life grosswritten premiums of £49 million in 2006. Aksigorta - Aksigorta is Turkey's fourth largest non-life insurer by market sharebased on premiums of £241 million in 2006. - Haci Omer Sabanci Holding AS, one of Turkey's leading financial andindustrial conglomerates, owns approximately 62% of Aksigorta. - Aksigorta's life insurance and pensions subsidiary, Ak Emeklilik, hadpension assets under management of £145 million at 31 December 2006 and lifegross written premiums of £23 million in 2006. Akbank - Akbank is Turkey's largest company by market capitalisation and itsmost profitable private bank. Akbank offers a wide range of retail, commercial,corporate and private banking services. Akbank has an extensive distributionnetwork including 687 branches and alternative delivery channels. - Haci Omer Sabanci Holding AS and its subsidiaries own approximately 39%of Akbank. In January 2007, Citigroup acquired a 20% stake in Akbank for US$3.1billion. Other - Aviva, Aksigorta and Akbank announced the signing of a memorandum ofunderstanding on 21 March 2007. - This agreement does not include Aviva Sigorta AS, Aviva's non-lifebusiness in Turkey, or Aksigorta's non-life operations. - Aviva HE had gross assets of £178 million (audited IFRS, converted at2.77 YTL/GBP) and Ak E had gross assets of £48 million (unaudited IFRS,converted at 2.77 YTL/GBP) at 31 December 2006. - Pension market position for the new company was based on 2 April 2007data provided by Pension Monitoring Center of Turkey (assets under management)and life market position was based on Q1 2007 data published by the Associationof Insurance and Reinsurance Companies of Turkey for life business (grosswritten premiums). - On a pro-forma basis, for year ending 31 December 2006, total annualpension contributions and life premiums of the joint venture would have been£194 million (converted at YTL 2.65/GBP) with total assets under management of£397 million (converted at 2.77/GBP). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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