National Australia Bank acquires Aviva life business

by Gill Montia

Story link: National Australia Bank acquires Aviva life business

Aviva is selling its Australian life assurance business to National Australia Bank, for £452 million

The disposal is in line with the group’s strategy of focusing on growth in Asian markets, where it already ranks ninth in the life assurance market.

Aviva Investors, the company’s Australian fund management unit, is not included in the sale

Chief executive, Andrew Moss, says: “This transaction realises excellent value for Aviva shareholders at around 16 times 2008 net earnings and demonstrates the underlying value of our business.”

He adds: “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.”

The group’s chief executive officer Asia Pacific, Simon Machell, comments: “Looking ahead, we will focus on the significant long-term growth markets of Asia, in particular, China and India.”

According to Aviva, it has become the second largest foreign life insurer in China in just six years.

The sale, which is expected to be completed in the third quarter of 2009, will also provide an opportunity to bolster the group’s capital position.