LONDON -- Aviva this morning announced that it has agreed the $1.8bn sale of Aviva USA Corporation, its U.S. life and annuities business and related asset management operations, to Athene Holding, a life insurance holding company.
The deal continues Aviva's road to recovery, following its plan to narrow the group's focus on markets where the insurer enjoys leadership positions, with chairman John McFarlane commenting:
The sale of Aviva USA is an important step forward in the delivery of our strategic plan. It considerably strengthens Aviva's financial position, increases group liquidity and improves our economic capital surplus, while also reducing its volatility. The disposal of the US business, combined with the recent settlement with Bankia, represents a successful end to the year and sets us up well for 2013.
The sale, which will see Aviva receive proceeds of $1.55 billion in cash after the repayment of external debt, is expected to be completed in 2013 following regulatory approvals.
The transaction places the group within its target range of 160%-175% of required capital (against 2011's target of 130%), while also reducing Aviva's credit risk exposure by around 25%.
Shares in the insurer rebounded on the news after initially slipping a few percentage points in early morning trading, now up over 1% at the time of writing.
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The article Aviva Agrees $1.8bn Sale of Aviva USA originally appeared on Fool.com.
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