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    AV.   GB0002162385


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Insurer Aviva exits three Spanish JVs in hunt for higher profits

05/10/2017 | 05:23am EDT
FILE PHOTO: People enter and exit the AVIVA headquarters building in Dublin.

LONDON (Reuters) - British insurer Aviva has sold its stake in three Spanish joint ventures for 475 million euros (399.5 million pounds), it said on Wednesday, as part of efforts to focus on more profitable markets.

Aviva has already sold part of its French business this year, and is conducting a strategic review of its operations in Taiwan. Its core markets include Britain and Canada.

The sale of a 50 percent stake in life insurance and pension joint ventures Unicorp Vida and Caja España Vida, and retail life insurance business Aviva Vida y Pensiones, were all to Santalucía, Aviva said in a statement.

The deal, part of a strategic review of its Spanish operations, was done at an attractive price and was "a strong outcome for Aviva", Chief Executive Mark Wilson said.

"It highlights our absolute focus on allocating capital effectively across the group and further strengthens our capital and liquidity position," he said.

The deal price was roughly 1.5 times Aviva's share of the 2016 IFRS net asset value of the businesses, and 12 times its share of 2016 earnings after tax, Aviva said. It remains subject to regulatory approvals and should close in the fourth quarter.

It leaves Aviva's Spanish unit with stakes in life insurance joint ventures with Caja Granada and Cajamurcia, both part of Banco Mare Nostrum, and Pelayo Group.

"Following today's announcement, Aviva is left with a couple of JVs in Spain that make operating earnings of 25 million to 30 million pounds, pre minorities and pretax," JPMorgan analyst Ashik Musaddi said in a note to clients.

"This, in our view, is in line with market speculation that (the) Spanish businesses could be worth around 700 million euros in total," he added, reaffirming an 'overweight' rating and 536 pence price target.

At 0839 GMT, shares in Aviva were up 0.7 percent at 539.3 pence a share, outperforming a flat FTSE 100 index.

Panmure Gordon analyst Barrie Cornes said in a note to clients the deal should be welcomed by shareholders, flagging a 'buy' rating on the stock and 592 pence price target.

"We believe that a combination of Aviva's self-help programme, current valuation and attractive dividend yield should see the share price rise in the short to medium term."

(Additional reporting by Rachel Armstrong; editing by Susan Thomas)

By Simon Jessop

ę Reuters 2017
Stocks mentioned in the article
ChangeLast1st jan.
AVIVA PLC -1.10% 386 Delayed Quote.20.02%
FTSE 100 -0.42% 6996.08 Delayed Quote.8.74%
MSCI TAIWAN (STRD) -0.24% 688.815 Real-time Quote.16.29%
MSCI UNITED KINGDOM (STRD) 0.04% 1138.911 Real-time Quote.9.85%
S&P UNITED KINGDOM (PDS) -0.39% 1394.47 Delayed Quote.9.31%
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Sales 2021 46 772 M 64 952 M 64 952 M
Net income 2021 2 260 M 3 138 M 3 138 M
Net cash 2021 8 664 M 12 032 M 12 032 M
P/E ratio 2021 6,73x
Yield 2021 5,62%
Capitalization 15 330 M 21 188 M 21 289 M
EV / Sales 2021 0,14x
EV / Sales 2022 0,14x
Nbr of Employees 28 596
Free-Float 97,1%
Duration : Period :
Aviva plc Technical Analysis Chart | AV. | GB0002162385 | MarketScreener
Technical analysis trends AVIVA PLC
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 21
Last Close Price 390,30 GBX
Average target price 468,27 GBX
Spread / Average Target 20,0%
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Amanda Blanc Chief Executive Officer & Executive Director
Jason Michael Windsor Chief Financial Officer & Director
Mark George Culmer Non-Executive Chairman
Nitinbhai Babubhai Maganbhai Amin Chief Operating Officer
Michael Mire Independent Non-Executive Director
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