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By Tanishaa Nadkar and Pushkala Aripaka
(Reuters) – General and life insurer Aviva
The British company said on Friday it will sell its majority stake in the business to the Singlife consortium, which includes alternative assets firm TPG, Japanese insurer Sumitomo Life and other existing Singlife shareholders.
Promising to shake up the organization after she took office in July, the new CEO, Amanda Blanc, vowed to downsize her operations in Asia and Europe.
Analysts have said the insurer is operating in too many countries and sectors, and its shares have lagged behind its rivals.
The stock closed 5% higher at 303.2 pence on Friday as investors welcomed the news.
“The sale of Aviva Singapore is an important first step in our new strategy to focus more of the Aviva portfolio,” said Blanc, who has been looking to move Aviva away from Asia, where some global players have struggled with competition.
The deal, one of the largest in insurance in Southeast Asia, comes as Singlife seeks to expand in the region.
TPG will become the largest shareholder in the new group, which will initially be called Aviva Singlife in Singapore, with a 35% stake. Aviva will retain a 25% equity stake and another 20% will go to Sumitomo.
The rest will be in the hands of other investors in Singlife, which started operations in Singapore in 2017 and has attracted clients with its digital offerings.
“We believe this constitutes an exceptional value creation for the group (Aviva) and represents a clear delivery from the new CEO, Amanda Blanc, in her promise of decisive action,” said Jefferies analysts.
The deal also consists of S $ 2 billion in cash and marketable securities, and S $ 250 million in supplier financial notes, Aviva said.
(Reporting by Tanishaa Nadkar and Pushkala Aripaka in Bangalore, and Anshuman Daga in Singapore; Edited by Sriraj Kalluvila, Shounak Dasgupta and Louise Heavens)
