Aviva has announced today (21 December) that it has agreed to sell Aviva USA Corporation, its US life and annuities business and related asset management operations, to Athene Holding Ltd , for $1.8bn (£1.1bn).
Aviva said the transaction represents significant further progress in narrowing the group’s focus on businesses and markets where Aviva enjoys “leadership positions” and is able to generate attractive returns with a high probability of success.
Aviva said the transaction will increase its economic capital surplus coverage ratio by 17 percentage points to 165 per cent, placing the group within its target range of 160-175 per cent of required capital.
The sale will also reduce the group’s credit risk exposure by approximately 25 per cent and reduce the sensitivity of the group’s economic capital results to credit spread movements by approximately 30 per cent, it added.
Athene Holding is a life insurance holding company focused principally on the retirement market and whose business, through its subsidiaries, is focused primarily on issuing and reinsuring fixed and equity indexed annuities.
John McFarlane, chairman of Aviva plc, said: “The sale of Aviva USA is an important step forward in the delivery of our strategic plan. It considerably strengthens Aviva’s financial position, increases group liquidity and improves our economic capital surplus whilst also reducing its volatility.
“The disposal of the US business, combined with the recent settlement with Bankia, represents a successful end to the year and sets us up well for 2013.”
