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Aviva restructure sees £152m Malaysian stake ditched
by Emma Dunkley on Jan 17, 2013 at 10:42
Aviva is selling its 49% stake in a Malaysian joint venture to Sun Life Assurance Company of Canada for £152 million, marking the latest move under the new chief executive to streamline the business.
The sale of CIMB-Aviva, which comprises CIMB Aviva Assurance Berhad and CIMB Aviva Takaful Berhad, comes shortly after the group sold its stake in Delta Lloyd Group for £350 million at the start of the year.
The disposals come at the start of new chief executive Mark Wilson’s tenure, who has said he aims to make Aviva a more nimble organisation.
Aviva said the latest transaction represents ‘further progress in narrowing the group’s focus on businesses and markets’ where it can generate returns with a ‘high probability of success.’
It added the transaction will increase Aviva’s capital surplus coverage ratio by around 2% to 171%.
CIMB-Aviva operates one of Malaysia’s largest bancassurance platforms, offering insurance products through its exclusive distribution agreement with CIMB Bank.
Aviva has had a 49% shareholding in CIMB-Aviva since forming the joint-venture with CIMB in 2007.
In another, related transaction, CIMB has agreed to sell the majority of its interest in CIMB-Aviva to Khazanah Nasional Berhad, the Government of Malaysia’s strategic investment fund. CIMB will become a minority shareholder and continue its distribution relationship with the company.
Wilson said: ‘This is a good deal at an attractive valuation. The sale realises a strong return for our shareholders and is a tangible step in our journey towards a more focused, higher performing organisation.
‘Together with the recent disposal of our remaining stake in Delta Lloyd, this has been a satisfactory start to the year.’
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