Proactive Investors - Aviva PLC (LON:AV.) has offloaded its 25.9% stake in Singapore Life Holdings (Singlife), and two debt instruments, to Sumitomo Life Insurance for £0.8 billion cash as it continues to streamline its operations.
Amanda Blanc, chief executive officer, said: “This is a good outcome for Aviva.”
“The transaction further simplifies the business and we are in a very strong position to build on our trading momentum in the UK, Ireland and Canada,” she added.
Sumitomo Life will pay £0.5 billion for Aviva's equity stake and £0.3 billion for two debt instruments that are also included in the sale.
Aviva said the transaction would have increased its solvency II shareholder surplus as at 30 June 2023 by £0.4 billion and the solvency II shareholder ratio by c.8 percentage points.
The insurer said the deal “represents a further step in the simplification of Aviva's footprint following the international disposal programme completed in 2021”.
In 2022, Singlife contributed £17 million to Aviva's operating profit and the combined carrying value of the equity stake and debt holdings contributed £729 million to Aviva's IFRS 17 net asset value as at 30 June 2023.
The proceeds will be considered alongside Aviva's existing capital management framework which makes any surplus capital available for reinvestment in the business, bolt-on M&A and/or additional returns to shareholders, Aviva said.
The deal should close in the fourth quarter.