Aviva sells Aussie arm for £452m

22nd Jun 2009 07:12

Life group Aviva has sold its Australian business to National Australia Bank for £452m, boosting its capital surplus by £400m. Total cash proceeds of from the sale are A$925m (£452m) comprising A$825m cash on completion, a dividend of A$40m and A$60m for a net asset adjustment.Aviva said the sale supports its strategy of focusing on the key growth markets in Asia where leading positions can be achieved. "It would be challenging to reach a leading position in Australia in the foreseeable future in an increasingly consolidated market," it added. Aviva currently ranks ninth in the life market and its wealth management platform is ranked eighth. "This transaction realises excellent value for Aviva shareholders at around 16 times 2008 net earnings and demonstrates the underlying value of our business. 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," said Andrew Moss, Aviva chief executive.