Allianz to buy Aviva Poland for €2.5bn
Aviva is to sell its entire shareholding in Aviva Poland to Allianz for a cash consideration of €2.5 billion, valuing the acquired business at €2.7 billion.
Aviva said it will now focus on its strongest businesses in the UK, Ireland and Canada. The divestment of Aviva Poland is the eighth transaction Aviva has announced in the past eight months, and concludes the planned refocus of the group’s portfolio.
Allianz said the agreement represents an important step for it to accelerate its story of strong profitability growth in the CEE region and scale up in Poland - the largest CEE market with 38 million inhabitants and GDP of approximately $600 billion.
Through the transaction, Allianz said it will double its revenues in the Polish insurance market and achieve a well-balanced business mix between property/casualty and life insurance. It added that in particular, Aviva’s strong focus on the dynamic and profitable Polish life protection market will significantly enhance Allianz’s operating profitability.
In addition, the strong tied agents’ network and the long-term bancassurance joint venture with Santander will bolster Allianz’s distribution footprint and market position.
"We are delighted to further strengthen visibility of the Allianz brand in Central Eastern Europe and pursue our successful growth strategy in the region. By combining our insurance and digital expertise and strong investments in technological innovation, customers will benefit from our innovative products and outstanding services," said Oliver Bäte, chief executive officer of Allianz SE.
Klaus-Peter Roehler, member of the board of management of Allianz SE responsible for insurance in German-speaking countries and Central Eastern Europe, said: "We are very pleased to enter into this agreement as the acquisition of Aviva’s business will reignite growth in Poland and produce a scale effect in the entire CEE region. With a customer-first approach to design and distribution, and using innovation and technology as key enablers to deliver customer satisfaction, we see this as a fantastic opportunity to strengthen our footprint."
Amanda Blanc, chief executive officer of Aviva, said: “The sale of our Polish business is an excellent conclusion to the refocusing of our portfolio announced just eight months ago. The sale of our eight non-core businesses will generate total cash proceeds of £7.5 billion. We have made significant progress with our debt reduction plan and in due course we will make a substantial return of capital to shareholders. Our strategic focus is now on our strongest businesses in the UK, Ireland and Canada where we have leading market positions and strong growth potential.
“This transaction delivers excellent value for Aviva shareholders. It is also a very positive outcome for our customers, employees and distribution partners and we are confident that Aviva Poland will continue to prosper under Allianz's ownership.”
There will be no impact on customers’ policies as a result of the announcement. The management and employees of Aviva Poland will transfer with the business.
Aviva expects to use the increased capital and cash to support its previously communicated capital framework of debt reduction, investment for long-term growth and return of excess capital to shareholders. The transaction is subject to customary closing conditions, including regulatory and anti-trust approvals, and is expected to complete within 12 months.
In 2020, Aviva Poland’s IFRS profit after tax was £130 million. The IFRS gross assets and net assets value of Aviva Poland were £3.9 billion and £0.4 billion respectively as at 31 December 2020. Aviva Investors Poland, which manages funds of Aviva Poland, will be part of the transaction. The assets under management of Aviva Investors Poland was £3.7 billion at 31 December 2020 and IFRS profit after tax in 2020 was £4 million.
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
