U.K.'s Aviva Looks to Sell Friends Provident International for Up to $750 Million
March 28 2017 - 1:49AM
Dow Jones News
By Kane Wu and Julie Steinberg
U.K.-based insurer Aviva PLC is looking to sell Friends
Provident International Ltd., its unit that serves high-net-worth
clients in Asia and the Middle East, in a deal that could fetch up
to $750 million, according to people familiar with the
situation.
Aviva's sale of Friends Provident International comes less than
two years after it bought the business in April 2015, as part of a
GBP5.6 billion ($8.8 billion) deal to acquire Friends Life Group
Ltd., which at the time created the U.K's largest insurance,
savings and asset-management company.
Based in the Isle of Man, a self-governing island situated
between the U.K. and Ireland that many consider a tax haven,
Friends Provident International provides life assurance and
investment products to global expatriate and domestic affluent
customers in Hong Kong, Singapore, United Arab Emirates and other
selected markets.
Aviva said in its full-year 2016 financial report that Friends
Provident International is under strategic review. The insurer sees
little growth in the unit, whose main clientele are British
expatriates, analysts say. Aviva's gross operating profit in Asia
dropped 4% year over year in 2016, compared with a 12% increase in
gross operating profit globally.
Aviva has received a number of pre-emptive offers for the unit,
although a formal bidding process hasn't started, the people said.
Chinese conglomerates Fosun Group and HNA Group are among those
evaluating the unit, according to two of the people. Both companies
declined to comment.
A spokeswoman for Aviva said there is no update on the review
and declined to comment further.
Goldman Sachs Group Inc. is running the sale, people familiar
with the situation said. The bank declined to comment.
Overseas insurance companies are attractive to Chinese buyers as
they can then reinvest the premiums collected without going through
China's foreign-exchange approval process, a great advantage at a
time when the country is tightening its capital outflow.
Chinese companies bid aggressively for ING Life's South Korea
unit last year. They also struck deals to acquire Singapore-based
Asia Capital Reinsurance Group Pte. Ltd., Hong Kong-based Dah Sing
Life Assurance Co. and most recently Hong Kong Life Insurance
Ltd.
In January, Aviva, together with Chinese private-equity firm
Hillhouse Capital and tech giant Tencent Holdings Ltd., agreed to
develop an insurance company in Hong Kong to focus on digital
insurance.
As part of the agreement, Hillhouse and Tencent would acquire
shares in Aviva Life Insurance Company Ltd. (Aviva Hong Kong), the
insurer said at the time. Aviva and Hillhouse will each hold a 40%
stake and Tencent 20%.
Write to Kane Wu at Kane.Wu@wsj.com and Julie Steinberg at
julie.steinberg@wsj.com
(END) Dow Jones Newswires
March 28, 2017 01:34 ET (05:34 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Aviva (LSE:AV.)
Historical Stock Chart
From Mar 2024 to Apr 2024
Aviva (LSE:AV.)
Historical Stock Chart
From Apr 2023 to Apr 2024