FTAdviser.com

Advertising

The pensions and insurance group said it expects proceeds of A$925m (£452m), comprised of a cash consideration of $825m from NAB on completion.

It also said it expects a further A$40m dividend to be paid by Aviva Australia prior to completion, and a forecast amount of A$60m representing a net asset adjustment to be paid post completion.

Aviva said the total cash proceeds represent 16-times 2008 net earnings and provides the group with increased financial flexibility, improving its IGD surplus by £0.4bn, to 31 March 2009.

The group said the decision to sell the businesses was based on the belief that it would be challenging to reach a leading position in Australia in the foreseeable future in an increasingly consolidated market.

Aviva currently ranks ninth in the Australian life market and its wealth management platform is ranked eighth.

Andrew Moss, Aviva chief executive officer, said: "This transaction realises excellent value for Aviva shareholders at around 16 times 2008 net earnings and demonstrates the underlying value of our business."

"It gives us greater financial flexibility and we can redeploy the capital to other markets which we believe will deliver better returns to our shareholders over the next few years."

Simon Machell, CEO for Asia Pacific at Aviva, added: "Looking ahead, we will focus on the significant long-term growth markets of Asia, in particular, China and India.

"Here we have quickly developed strong market positions and have become the second largest foreign life insurer in China in just six years."

The sale is subject to regulatory approval and is expected to close in the third quarter of 2009.