Aviva is to sell its US life and annuities business in a £1.1 billion deal.
The Aviva US arm is being sold to life insurance firm Athene Holding, and will leave parent company Aviva with £1 billion in cash after a debt paydown.
The disposal is part of a strategic overhaul at Aviva as it looks to cut costs. The life insurer recently disposed of its share of Spanish venture Aseval in a deal with local bank Bankia, which netted it £494 million.
The two disposals meet Aviva's plan to narrow its focus on areas where it is already in a market leading position. It will also bolster the firm’s balance sheet, increasing liquidity and reducing credit risk exposure.
‘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,’ Aviva chairman John McFarlane (pictured) told the stockmarket.
‘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.’