Aviva sells French business to Macif's Aéma Groupe for 3.2b euros

London-based Aviva said the sale would increase excess capital by $3.37 billion.
London-based Aviva said the sale would increase excess capital by $3.37 billion.PHOTO: REUTERS

LONDON (REUTERS) - Aviva has agreed the sale of its operations in France for 3.2 billion euros (S$5.14 billion) to Macif's Aéma Groupe, as part of the British insurer's shift to focus on its core operations in Britain, Ireland and Canada.

London-based Aviva, led by boss Amanda Blanc, said the sale would increase excess capital by £2.1 billion (S$3.37 billion) and cash of around £2.8 billion.

Aéma Groupe, formed in January through the merger of French mutual insurer Macif Group and Aésio Mutuelle, has eight million customers and a turnover of eight billion euros.

Aviva France has three million customers and 7.8 billion euros in revenue. It covers life insurance, property and casualty and asset management markets in France.

Aviva's share price rose by 1.7 per cent at the open in London.

"The transaction will increase Aviva's financial strength, remove significant volatility and bring real focus to the group," chief executive officer Blanc said.

Aviva expects to use the proceeds of the sale to support debt reduction, invest for long-term growth and return excess capital to shareholders.

The sale is central to Ms Blanc's turnaround plan aimed at streamlining its business after prolonged share price weakness has concerned investors.

The insurer, which aims to complete the disposal by the end of 2021, is looking to sell its continental European and Asian businesses, it said last year.

Final bids for its Polish operations that could fetch around two billion euros are due on Friday, sources have previously told Reuters.

It is also in the process of selling its Italian business, sources had said.