LONDON, UK: Aviva plc has agreed to sell its 25.9% stake in Singapore Life Holdings Pte Ltd (Singlife), together with two debt instruments, to Sumitomo Life Insurance Company for total consideration of £0.8 billion (SGD 1.4 billion) payable in cash at closing.
Sumitomo Life will pay consideration of £0.5 billion (SGD 0.9 billion) for Aviva’s equity stake and £0.3 billion (SGD 0.5 billion) for the two debt instruments. Sumitomo Life is currently a 23.2% shareholder in Singlife and sees Singapore as a key market within its overall Southeast Asia strategy.
Amanda Blanc, Group Chief Executive Officer of Aviva, said: “This is a good outcome for Aviva. The transaction further simplifies the business and we are in a very strong position to build on our trading momentum in the UK, Ireland and Canada.”
In 2022, Singlife contributed £17 million to Aviva’s operating profit. The combined carrying value of the equity stake and debt holdings contributed £729 million to Aviva’s IFRS 17 net asset value as at 30 June 2023.
The transaction would have increased Aviva’s Solvency II shareholder surplus as at 30 June 2023 by £0.4 billion and the Solvency II shareholder ratio by c.8 percentage points. It would have increased centre liquidity by £0.8 billion. The equity value represents a multiple of 2.2x Solvency II Unrestricted Tier 1 capital as at June 2023.
Aviva’s exit from the Singlife joint venture represents a further step in the simplification of Aviva’s footprint following the international disposal programme completed in 2021. It is also consistent with the group’s ambition to focus on its capital-light business units. Aviva sold its majority stake in Aviva Singapore to a consortium led by Singlife in 2020.
The disposal proceeds will be considered alongside Aviva’s existing capital management framework. Under this framework, any surplus capital is available for reinvestment in the business, bolt-on M&A, and/or additional returns to shareholders.
The transaction is subject to customary closing conditions, including regulatory approvals where required, and is expected to complete in Q4 2023.