Insurer Aviva has announced plans to sell the entirety of its shareholding in its Italian joint venture, Avipop Assicurazioni S.p.A. (JV), to Banco BPM S.p.A (Banco BPM) for €265 million (£233 million).
The acquisition also includes the wholly owned subsidiary of JV, Avipop Vita S.p.A, and the consideration is payable in cash upon completion of the deal.
The announcement comes after Aviva received a notification of Banco BPM’s intention not to renew its distribution agreement with the insurer, and Aviva’s decision to then exercise its put option.
According to an announcement, the consideration represents 27.1 times Aviva’s share of 2016 earnings after tax, and roughly 1.1 times the company’s share of IFRS net asset value of the business. Furthermore, the deal increases Solvency II capital by around £200 million.
The deal is expected to close in 2018, and remains subject to regulatory approvals. While Aviva’s other Italian operations aren’t impacted by the transaction.
