The landmark acquisition, spearheaded by Aviva’s CEO, Amanda Blanc, marks the largest deal under her leadership.
According to a report by Reuters, the targeted acquisition, known as AIG Life UK, will be acquired from Corebridge Financial Inc, a New York-listed entity predominantly owned by AIG.
Amanda Blanc, who has been at the helm of Aviva for the past three years, has been dedicated to enhancing investor returns and strategically refocusing the company on its core markets. This restructuring effort involved divesting various business units globally, resulting in the influx of substantial capital.
Financial analysts at RBC have expressed their approval of this deal, considering it a prudent allocation of the capital recently raised through the sale of Aviva’s stake in Singapore Life. They indicated that their earlier forecast of a £300 million share buyback in the full-year results remains unchanged.
However, the news of the acquisition had a marginal impact on Aviva’s stock, with shares dipping by 0.4% during early trading.
Amanda Blanc said that this acquisition would reinforce Aviva’s position in a promising market, positioning the company for “capital-light growth.” The transaction is set to bring aboard 1.3 million individual protection customers and 1.4 million group protection members. It is expected to conclude in the first half of 2024, pending regulatory approvals.
“This acquisition brings significant strategic and financial benefits to Aviva. It strengthens our prospects in the highly attractive UK protection market and continues our progress in repositioning the Group towards capital-light growth. We look forward to welcoming our new customers and colleagues to Aviva,” Blanc commented.
Aviva acknowledged that the deal would lead to approximately a 5 percentage point reduction in its group solvency II cover ratio.
Peter Zaffino, Chairman and CEO of AIG, as well as the Chairman of Corebridge, expressed that this deal aligns with the strategic focus of their business, emphasising life and retirement products in the US.
Corebridge was established in 2021 when AIG spun off its life and retirement division and sold a share of the company to Blackstone for a substantial $2.2 billion. In September of the previous year, AIG took Corebridge public through a share offering that successfully raised $1.7 billion.
The acquisition of AIG Life UK by Aviva represents a significant step in the evolution of both companies, with Amanda Blanc’s leadership at the forefront of this transformative deal.