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Aviva boosts capital surplus as it says adios to Spain
Life insurer Aviva has almost entirely pulled out of Spain after selling out of two more life and pensions joint ventures in the country for £178m in cash.
The FTSE 100 group sold its share of JVs with Cajamurcia Vida and Caja Granada Vida to Spain's Bankia for 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.
The transaction will lift Aviva's Solvency II capital surplus by £150m.
Following similar exits from several other Spanish JVs since the local consolidation that followed the restructuring of the Spanish banking system in 2010, the company has raised combined proceeds of £1.3bn.
This latest transaction is expected to complete in the second quarter of 2018, subject to regulatory and anti-trust approvals.
Following completion of the transaction, Aviva will retain a stake in a small life insurance operation, Pelayo Vida, and a residual support centre in Spain.
Chief executive Mark Wilson said: "This sale is a strong return for our shareholders."
He added: "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."