British insurer Aviva has announced the €202m (£178m) sale of its remaining Spanish businesses Cajamurcia Vida and Caja Granada Vida to Spanish lender Bankia.
The price to sell Aviva’s entire shareholding in the life insurance and pensions joint ventures 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, the British insurer said.
Through the deal, subject to regulatory approval and expected to be complete in the second quarter of 2018, Aviva’s Solvency II capital surplus will increase by about £150m.
“Following the restructuring of the Spanish banking system, which started in 2010, and the subsequent consolidation among Aviva’s banking partners, Aviva has taken steps to protect the value of its distribution agreements in Spain,” Aviva said in a statement.
Aviva sold last year its stakes in three Spanish joint ventures to Santalucía, which together alongside this latest sale announced amount to €1.6bn (£1.3bn).
Mark Wilson, Group Chief Executive Officer at Aviva, said: “This sale is a strong return for our shareholders. It means that over the past five years we have generated proceeds of £1.3 billion 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.“
After the transaction, Aviva will retain a stake in a small insurance operation, Pelayo Vida, and a residual support centre in Spain.