Aviva announced today (23 February) the sale of its remaining Spanish life insurance and pensions business to Bankia, for €202m (£178m).
Aviva held a 50 per cent stake in Cajamurcia Vida and 25 per cent in Caja Granada Vida, which were sold to the Spanish bank.
According to the provider, the value of the transaction represents 2.1 times Aviva's share of the IFRS net asset value and 22.5 times Aviva's share of earnings after tax of these businesses.
This deal will result in an increase of about £150m in Aviva's Solvency II capital surplus, it added.
Aviva said it took "steps to protect the value of its distribution agreements in Spain" following the restructuring of the Spanish banking system, which started in 2010, and the subsequent consolidation among the provider's banking partners.
The company sold its shareholdings in its joint ventures with Bankia in 2012 and Novacaixagalicia Grupo in 2014, and in 2017 it sold the majority of its remaining business to Santalucía.
Together with the sale announced today (23 February), the combined proceeds amount to €1.6bn (£1.3bn), Aviva added.
According to Mark Wilson, group chief executive at Aviva, the sale is a strong return for the company's shareholders.
He said: "It means that over the past five years we have generated proceeds of £1.3bn from selling almost all of our Spanish operations.
"The transaction further simplifies Aviva, strengthens our already healthy capital position and is another example of our focus on attractive, growing markets where we have high quality franchises."
The transaction is subject to regulatory and anti-trust approvals and is expected to complete in the second quarter of 2018, Aviva said.
Following completion of the transaction, the provider will retain a stake in a small life insurance operation, Pelayo Vida, and a residual support centre in Spain.
maria.espadinha@ft.com
