Aviva to exit Singlife joint venture
Aviva announced that it has agreed to sell its 25.9% stake in Singapore Life Holdings Pte Ltd (Singlife), together with two debt instruments, to Sumitomo Life Insurance Company for total consideration of £0.8 billion (SGD 1.4 billion) payable in cash at closing. Sumitomo Life will pay consideration of £0.5 billion for Aviva’s equity stake and £0.3 billion for the two debt instruments. Sumitomo Life is currently a 23.2% shareholder in Singlife and sees Singapore as a key market within its overall Southeast Asia strategy.
In 2022, Singlife contributed £17 million to Aviva’s operating profit.
In 2020, Singapore Life acquired a majority stake in Aviva Singapore as part of a merger deal valuing the combined entity at S$3.2 billion. Aviva received SGD 2.7 billion of total consideration, comprised of SGD 2.0 billion1 (£1.1 billion) of cash and marketable securities, SGD 250 million in vendor finance notes and a 26% equity shareholding in Aviva Singlife.
Aviva’s exit from the Singlife joint venture represents a further step in the simplification of the company’s footprint. It is also consistent with the group’s ambition to focus on its capital-light business units. Aviva sold its majority stake in Aviva Singapore to a consortium led by Singlife in 2020.
The proceeds will be considered alongside Aviva’s existing capital management framework. Under this framework, any surplus capital is available for reinvestment in the business, bolt-on M&A, and/or additional returns to shareholders.
The transaction is subject to customary closing conditions, including regulatory approvals where required, and is expected to complete in Q4 2023.
“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.” – Amanda Blanc, group CEO of Aviva.