Aviva has agreed to sell its 25.9% stake in Singapore Life Holdings to Sumitomo Life for a total consideration of £800m.

The deal, which also includes two debt instruments, will be payable in cash at closing.

Sumitomo Life will pay £500m for Aviva’s equity Singlife stake and £300m for the two debt instruments. The Japanese insurance group is currently a 23.2% shareholder in Singlife and sees Singapore as a key market within its overall South East Asia strategy.

Aviva’s exit from the Singlife joint venture represents a further step towards simplifying its footprint following the international disposal programme it completed in 2021. The deal is also consistent with the group’s ambition to focus on capital-light business units.

In 2020, Aviva sold its majority stake in Aviva Singapore to a consortium led by Singlife, and in 2022, Singlife had contributed £17m to Aviva’s operating profit. The combined carrying value of the equity stake and debt holdings contributed £729m to Aviva’s IFRS 17 net asset value, as of Q2 this year.

The disposal proceeds from the transaction will be considered alongside Aviva’s existing capital management framework, meaning any surplus capital will be available for reinvestment in the business, bolt-on M&A, or additional returns to shareholders.

Group CEO of Aviva, Amanda Blanc, described the deal as a “good outcome”.

“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,” Blanc said.

The deal remains subject to customary closing conditions, including regulatory approvals, and is expected to complete in Q4 2023.

Share Story: