Aviva to ditch entire stake in Woori Aviva Life
15 April 2014
Category: News, Asia, Korea, Indonesia, Southeast Asia
By Asia Asset Management
Aviva plc has reached an agreement to sell its entire 47% stake in its South Korean business Woori Aviva Life Insurance (WALI) to NongHyup Financial Group (NHFG). WALI is majority owned by Woori Financial Holdings Company Limited (Woori), which has also agreed to sell its stake to NHFG as part of this transaction.
The agreement is consistent with Aviva’s strategy to focus on markets where it has scale or a sustainable competitive advantage to maximise return on capital. The transaction will have a neutral impact on the group’s IFRS net assets and will increase economic capital surplus by £200 million (US$334.42 million), recognising the reduced exposure to interest rate and credit risk.
The sale of WALI is part of a broader privatisation of Woori by the government of South Korea and is subject to regulatory approval.
Khor Hock Seng, chief executive of Aviva Asia, said: “Aviva has a strong presence in China and Southeast Asia, which are key future cash generators for the group. This deal provides further focus to our Asian businesses, which increased value of new business by 65% in 2013.”
In January 2014 Aviva signed a joint venture agreement (subject to local regulatory approval) with Astra International, Indonesia’s largest conglomerate, further underlining its commitment to selected markets in Asia.