Aviva sells €3.2bn French business to Aéma Groupe

Aviva said it has agreed the sale of its operations in France for €3.2 billion in cash to Macif’s Aéma Groupe as part of the British insurer’s shift to focus on its core operations in the UK, Ireland and Canada.

Aéma Groupe was formed in January through the merger of French mutual insurer Macif Group and Aésio Mutuelle and has eight million customers and a turnover of €8 billion.

Aviva said the sale of Aviva France strengthens its capital and liquidity with an increase in excess capital of £2.1 billion.

It said the transaction covers the French life, general insurance, and asset management businesses and the 75% shareholding in UFF (Aviva France).

Aviva CEO Amanda Blanc said: “The sale of Aviva France is a very significant milestone in the delivery of our strategy.

“It is an excellent outcome for shareholders, customers, employees and distributors.

“The transaction will increase Aviva’s financial strength, remove significant volatility and bring real focus to the group …

 “Aéma Groupe has a strong heritage in the French insurance industry and this transaction will propel it to a top five position in the French market.

“I am confident Aéma Groupe will be an excellent owner of Aviva France.”

Aéma Groupe said: “With 7.8 billion euros revenues, 335 million euros net income and 3 million customers as of December 31, 2019, Aviva France holds strong positions in life insurance, property & casualty and asset management markets in France, and benefits from a tier one distribution network with nearly 1,000 tied agents.

“Aviva France employs 4,200 people.

“Aviva France’s expertises and distribution networks are complementary to Aema’s activities …

“The future group, including Aviva France’s acquisition, would represent €16 billion revenues and become a key protection and insurance provider among the top 5 in the French market.

“The financing of this €3.2 billion acquisition will rely on the group’s equity and the issuance of €1.75 billion subordinated debt.

“Upon completion of this transaction, Aéma Groupe would hold a strong financial position, with €11 billion regulatory capital, a debt position comparable to its peers and and a solvency ratio of more than 165%, to recover to 200% within 4 years.”