Dec. 18 (Bloomberg) -- Aviva Plc, the U.K.’s second-biggest insurer by market value, said it will sell its stake in joint venture Aseval to Bankia SA for about 608 million euros ($803 million).
Aviva will receive the cash payment for the holding in the Spanish life insurer by April 30, the London-based firm said in a statement today. The deal will increase Aviva’s surplus capital by about 500 million pounds ($813 million), it said.
CGU Plc, which merged with Norwich Union Plc to become Aviva, bought the stake in 2000 for about 200 million pounds, allowing it to sell life insurance and pensions to customers of Spanish lender, Bancaja, which became part of the Bankia group in 2010. Aviva Chairman John McFarlane has pledged to sell businesses that tie up 6 billion pounds of capital to build reserves eroded by the European sovereign debt crisis.
“This settlement is in line with our strategy to increase Aviva’s financial strength,” McFarlane said in the statement. The insurer will continue to serve customers in Spain through its other bank partners and distribution agencies, he said.
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