LONDON: Aviva plc, international savings, retirement and insurance business, has agreed to sell a majority shareholding in Aviva Singapore to a consortium led by Singapore Life Ltd (Singlife) to support the creation of one of the country’s leading insurance companies, a news release said.

On completion, Aviva will receive SGD 2.7 billion (£1.6 billion) in consideration, which is comprised of SGD 2.0 billion (£1.2 billion) in cash and marketable securities1, SGD 250 million in vendor finance notes and a 25% equity shareholding in the new group. The transaction represents a multiple of 18.7x Aviva Singapore’s 2019 IFRS profit after tax, 2.0x Solvency II Own Funds at 30 June 2020 and 1.9x Net Asset Value at 30 June 2020.

The combination brings together Aviva Singapore’s scale and leading franchise with Singlife’s innovative and digitally focused capabilities. In Singapore, the new business will be initially branded as Aviva Singlife.

The Singlife consortium includes TPG, a leading global alternative asset firm, which will become the largest shareholder in the new group upon completion, Sumitomo Life, a leading Japanese insurer, and other existing Singlife shareholders.

The transaction would have increased Aviva plc’s Net Asset Value at 30 June 2020 by £0.7 billion2, strengthened Solvency II capital surplus by £0.5 billion and increased the Group Solvency ratio on a shareholder basis by approximately 4 percentage points. In 2019, Aviva Singapore’s IFRS profit after tax was £83 million and it remitted £46 million cash to the group. The gross assets of Aviva Singapore were £6.6 billion at 30 June 2020.

Customers and partners of Aviva Singapore will continue to deal with Aviva as usual and there is no impact to customer policies as a result of this announcement3. Aviva Investors’ operations and clients in Asia will not be impacted by this transaction.

The proceeds will be used to further strengthen Aviva’s central liquidity and will be considered as part of Aviva’s broader capital management and debt reduction objectives.

The transaction is subject to customary closing conditions, including regulatory approval, and is expected to complete by January 2021.

Amanda Blanc, Group Chief Executive Officer of Aviva, said: “The sale of Aviva Singapore is a significant first step in our new strategy to bring greater focus to Aviva’s portfolio. We have achieved excellent upfront value for shareholders but have also retained an investment in a leading Singapore life business with attractive long term growth potential. The proceeds from the sale will further strengthen our financial position and enhance our ability to meet our strategic objectives.

We continue to work at pace and are seeking to take decisive action on our portfolio with the goal of further enhancing long term value for our shareholders.”  

www.aviva.com