Aviva has agreed to take a major step in the transformation of its businesses in Canada, Ireland, and the UK, leading to the sale of Aviva France for Aéma Groupe for €3.2 billion in cash.
Aviva has employed 1,500 at its Life and Health insurance operation in Sheffield and over 2,000 people at its life and general insurance business in York.
In a statement, the Chief Executive Officer, Amanda Blanc, stated that the sale of Aviva is significant in their strategy and is an excellent consequence for employees, shareholders, customers, and distributors.
The transaction will bolster Aviva’s financial strength, bring attention to the Group, and remove significant volatility, she said.
With the increased capital and cash from the transaction, Aviva plans to support its previously communicated capital framework of debt reduction, return of excess capital to shareholders, and investment for long-term growth.
Aviva France is the biggest chunk of the Group’s manage-for-value portfolio, and the transaction will help reduce the volatility in the Group’s solvency ratio with the removal of exposure-to-interest rate risk from the Eurofonds guaranteed life insurance product.
As per the transaction with the Aéma Groupe, Aviva will comply with customary warranties and indemnities that will have a trivial impact on Aviva’s solvency position. Aéma Groupe is a leading French mutual insurer with more than €8 billion and €7.4 billion of equity.