Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Aviva Rallies After Sale of U.S. Insurance Unit to Apollo

Oct. 3 (Bloomberg) -- Aviva Plc rallied to a two-week high in London trading after it sold its U.S. business to Apollo Global Management LLC for a higher-than-expected $2.6 billion.

The stock climbed 1.4 percent to 413.1 pence, the highest level since Sept. 19, extending gains this year to 11 percent. Aviva said in December that the life-insurance and annuities business was priced at $1.8 billion when the companies agreed the deal.

“The additional $800 million of unexpected cash further de-risks Aviva’s financial position,” Jon Hocking, an analyst at Morgan Stanley in London with an overweight rating, said in a note to clients. It “modestly adds to solvency ratios, but more importantly will materially improve the cash position.”

Aviva, the U.K.’s second-largest insurer by market value, is rebuilding reserves depleted by the financial crisis. Chief Executive Officer Mark Wilson, who succeeded Andrew Moss this year, is eliminating jobs and cutting costs as the company shrinks a 5.1 billion-pound ($8.3 billion) internal loan.

“The sale of the U.S. business is another milestone for Aviva,” Wilson said in a statement. It “is a step toward our goal of creating a business focused on cash flow and growth,” he said.

Apollo’s Athene Holding Ltd. said it paid $1.55 billion for the Aviva unit, while the U.K. insurer said it gets $2.3 billion after a $290 million loan repayment. The higher-than-expected proceeds are tied to earnings and other financial results in the period from June 30, 2012, to Sept. 30, 2013, Aviva said.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.