Aviva Sells Italy Units to Allianz, CNP in $1.1 Billion Deal

Aviva Plc has exited its Italian businesses in a pair of deals totaling 873 million euros ($1.1 billion) as the U.K. insurer continues to pivot toward its core markets.

CNP Assurances and Allianz SE bought the London-based firm’s Italian life and general insurance units respectively, according to a statement Thursday. Those deals, following the company’s recent French sale, mean the firm has now completed the bulk of its planned exits from non-core areas.

Aviva’s shares rose as much as 4.1% in Thursday morning trading in London.

Aviva Sells Italy Units to Allianz, CNP in $1.1 Billion Deal

“We have taken major steps forward in simplifying the business,” Chief Executive Officer Amanda Blanc said in the statement. “Our strategic focus is now on the U.K., Ireland and Canada where we have leading positions.”

Since joining last July, Blanc has moved at pace to exit businesses in Europe and Asia. The firm last month agreed to sell its French operation for 3.2 billion euros, the biggest deal yet among seven divestments that Blanc says will generate more than 5 billion pounds in cash proceeds.

In the Italian deals announced Thursday, CNP Assurances paid 543 million euros and the Allianz sale was agreed at 330 million euros.

The firm is also looking for a new office headquarters in London, according to people familiar with the matter. The search coincides with Aviva’s plans to cut up to 30% of its 1.7 million square feet (158,000 square meters) of office space across the U.K. as more employees work from home, according to an analyst presentation Thursday.

‘Substantial Return’

Aviva, which earns most of its revenues from life insurance, had long been under pressure from investors and analysts to turn around the business prior to Blanc’s arrival. The share price remains lower than its level five years ago.

The firm, which also declared a 14 pence per share final dividend in its annual results statement Thursday, said the disposals would soon be able “to make a substantial return of capital to our shareholders.”

Aviva reported an operating profit of 3.2 billion pounds ($4.5 billion) for 2020, which was down slightly from the previous year but better than analysts had expected. The company expects to reduce its debt by 1.7 billion pounds in the first half of this year.

Aviva Investors, the firm’s asset management arm, saw inflows of 8.5 billion pounds for the year. Operating profit at the unit fell 11% to 85 million pounds.

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