(Reuters) - British insurer Aviva said it would sell its remaining Spanish businesses Cajamurcia Vida and Caja Granada Vida to Spain’s state-owned lender Bankia for 202 million euros ($248.1 million).
The price to sell its entire shareholding in the life insurance and pensions joint ventures represents 2.1 times Aviva’s share of the IFRS net asset value and 22.5 times Aviva’s share of earnings after tax of these businesses, it said.
With the deal, Aviva’s Solvency II capital surplus will go up by about 150 million pounds, it said.
“Following the restructuring of the Spanish banking system, which started in 2010, and the subsequent consolidation among Aviva’s banking partners, Aviva has taken steps to protect the value of its distribution agreements in Spain,” the insurer said in a statement.
Aviva pulled back from several markets last year, selling its stakes in three Spanish joint ventures, its Italian joint venture, part of its French business and its Taiwan joint venture stake, to focus on core markets including Britain and Canada.
“(The sale) means that over the past five years we have generated proceeds of 1.3 billion pounds from selling almost all of our Spanish operations,” Aviva CEO Mark Wilson said.
After the deal, Aviva would retain a stake in a small life insurance operation, Pelayo Vida, and a residual support centre in Spain, it said.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier