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Aviva poised to sell off US life division at 'substantial discount' Aviva poised to sell off US life division at 'substantial discount'
(about 2 hours later)
Aviva is inching closer to a sale of its US life business as part of a major revamp of its operations, but the insurer admitted it would have to knock down the price of the division.Aviva is inching closer to a sale of its US life business as part of a major revamp of its operations, but the insurer admitted it would have to knock down the price of the division.
New chairman John MacFarlane launched a drastic restructuring plan in July, which includes selling off or scaling back 16 underperforming businesses and improving the performance of 27 others. MacFarlane has been running Aviva since shareholders, frustrated by the group's poor share price performance, ousted chief executive Andrew Moss in May. New chairman John McFarlane launched a drastic restructuring plan in July, which includes selling off or scaling back 16 underperforming businesses and improving the performance of 27 others. McFarlane has been running Aviva since shareholders, frustrated by the group's poor share price performance, ousted chief executive Andrew Moss in May.
The US life and annuities division is one of the 16. Aviva has also pulled out of Sri Lanka and sold down its stake in Dutch insurer Delta Lloyd. It plans to sell a further eight businesses next year and take "radical action" in five others, such as reducing capital allocated to them or stopping one or two altogether.The US life and annuities division is one of the 16. Aviva has also pulled out of Sri Lanka and sold down its stake in Dutch insurer Delta Lloyd. It plans to sell a further eight businesses next year and take "radical action" in five others, such as reducing capital allocated to them or stopping one or two altogether.
MacFarlane said the sale of the US unit would be at a "substantial discount" to the division's book value of £2.4bn, and would happen "reasonably soon". "We would expect shareholders in general to support it," he added. McFarlane said the sale of the US unit would be at a "substantial discount" to the division's book value of £2.4bn, and would happen "reasonably soon". "We would expect shareholders in general to support it," he added.
Aviva's sales fell 5% to £28.9bn in the first nine months of the year. New business sales in the troubled markets of Ireland, Spain, Italy, Poland and "other developed" countries all fell by more than 30%.Aviva's sales fell 5% to £28.9bn in the first nine months of the year. New business sales in the troubled markets of Ireland, Spain, Italy, Poland and "other developed" countries all fell by more than 30%.
The company has further reduced its exposure to crisis-stricken eurozone countries, mainly to Italy. It now holds £5.2bn of Italian sovereign debt, compared with £6.4bn at the end of last year.The company has further reduced its exposure to crisis-stricken eurozone countries, mainly to Italy. It now holds £5.2bn of Italian sovereign debt, compared with £6.4bn at the end of last year.
The search for a new chief executive is on track, with internal and external candidates being interviewed by Aviva's non-executive directors this week.The search for a new chief executive is on track, with internal and external candidates being interviewed by Aviva's non-executive directors this week.