Aviva plc, an insurance and financial services company, anticipates an additional £80 million (SGD 0.1 billion) in proceeds from the impending exit of its joint venture, Singlife, with Sumitomo Life Insurance Company.
The added funds result from a separate transaction where Sumitomo Life will acquire TPG’s equity stake in Singlife.
The total proceeds for Aviva’s stake in Singlife, including the sale of debt instruments, are now expected to reach approximately £930 million (SGD 1.6 billion).
The initial announcement of Aviva’s divestment from Singlife, comprising a 25.9% equity stake and two debt instruments, was made on September 13, 2023.
The sale, totaling £0.8 billion (SGD 1.4 billion), is part of Aviva’s strategy to streamline its geographic footprint and concentrate on capital-light business units. Sumitomo Life, already a 23.2% shareholder in Singlife, views Singapore as a pivotal market in its broader Southeast Asia strategy.
Amanda Blanc, Group Chief Executive Officer of Aviva, commented on the development, stating, “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 added £729 million to Aviva’s IFRS 17 net asset value as of June 30, 2023.
The transaction is projected to enhance Aviva’s Solvency II shareholder surplus by £0.4 billion, increase the Solvency II shareholder ratio by approximately 8 percentage points, and bolster center liquidity by £0.8 billion.
The Singlife joint venture exit aligns with Aviva’s ongoing efforts to simplify its operational footprint following the successful international disposal program in 2021.
Aviva previously divested its majority stake in Aviva Singapore to a consortium led by Singlife in 2020.
The transaction, subject to customary closing conditions and regulatory approvals, is expected to conclude in Q4 2023.
The disposal proceeds will be assessed within Aviva’s existing capital management framework, providing flexibility for reinvestment in the business, bolt-on M&A, and potential returns to shareholders.
