TIDMAV.
RNS Number : 4158W
Aviva PLC
14 November 2017
14 November 2017
AVIVA TO ACQUIRE IRISH INSURER FRIENDS FIRST
Aviva plc ("Aviva") today announces that it has reached an
agreement to acquire Irish insurer Friends First Life Assurance
Company dac ("Friends First") for a cash consideration of EUR130m
(GBP116m[1]). As a result of this acquisition, Aviva will become
one of the largest composite insurers in Ireland, with its market
share in life insurance increasing to 15%, alongside its existing
leading 15% market share in general insurance.
This transaction is in line with Aviva's strategy to allocate
capital in selected markets where it has scale or competitive
advantage and where it can further expand its range of products
across life and general insurance.
The consideration represents a multiple of 0.8x Friends First's
adjusted net asset value[2]. Aviva expects the transaction to meet
the group's operating return on capital hurdle from year one and to
significantly exceed the hurdle thereafter.
The Irish economy has experienced a robust recovery in recent
years and the prospects for continued growth remain strong[3]. The
life insurance market in Ireland has grown by c.9% since 2014[4].
Aviva Ireland has demonstrated consistent growth over the past few
years, with an operating profit growth at HY 2017 of 12%.
Friends First, currently owned by Dutch insurer Achmea Holding
NV, has been operating in Ireland for over 180 years with a focus
on life protection, pension and investment products for individuals
and companies. It has over 250,000 customers, a market share of 6%
and is a market leader in group risk and income protection.
The transaction is subject to regulatory approval and is
expected to complete in the first quarter of 2018.
Maurice Tulloch, CEO Aviva International Insurance said:
"Friends First is a natural fit for Aviva Ireland. The
acquisition will enhance Aviva Ireland's product offering and
accelerate our international growth agenda. It makes sense
financially, strategically and for our customers.
"Our Irish business has been among the best performers in the
Aviva group over the last couple of years. This acquisition
underlines Aviva's disciplined approach to deploying capital into
bolt-on acquisitions that meet our strict financial criteria and
strengthen our businesses."
John Quinlan, CEO Aviva Ireland, said:
"I look forward to welcoming the Friends First employees to the
Aviva group. Friends First is an excellent business and will be a
great addition to Aviva Ireland. Their expertise in the area of
income protection and group risk, in particular, will complement
and strengthen the broad range of insurance products we offer our
customers. It will also make us the leading insurer for brokers in
the Irish market. Together, our market leading insurance business
will be well placed to take full advantage of Ireland's fast
growing economy."
-ends-
Enquiries:
Media
Andrew Reid +44 (0)20 7662 3131
Yasmin Saleh +44 (0)20 7662 8710
Analysts
Chris Esson +44 (0)20 7662 8115
Diane Michelberger +44 (0)20 7662 0911
Notes to editors:
-- Aviva provides life insurance, general insurance, health
insurance and asset management to 33 million customers.
-- In the UK we are the leading insurer serving one in every
four households and have strong businesses in selected markets in
Europe, Asia and Canada. Our shares are listed on the London Stock
Exchange and we are a member of the FTSE100 index.
-- Aviva's asset management business, Aviva Investors, provides
asset management services to both Aviva and external clients, and
currently manages over GBP340 billion in assets. Total group assets
under management at Aviva group are GBP450 billion.
-- Aviva helps people save for the future and manage the risks
of everyday life; we paid out GBP34.4 billion in benefits and
claims in 2016.
-- By serving our customers well, we are building a business
which is strong and sustainable, which our people are proud to work
for, and which makes a positive contribution to society.
-- The Aviva media centre at http://www.aviva.com/media/
includes company information, images, and a news release
archive.
-- For an introduction to what we do and how we do it, please
click here http://www.aviva.com/about-us.
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booking.
[1] Based on EUR-GBP exchange rate on 13 November 2017. Final
consideration will be subject to customary completion
adjustments
[2] NAV at 31 December 2016 adjusted for dividend payments since
1 January 2017 and additional dividends expected prior to
completion
[3] OECD, European Commission, Economic and Social Research
Institute
[4] Compound annual growth rate for life insurance premiums for
the period from 2014 to 2016. Source: SwissRe's Sigma World
insurance in 2016 report
This information is provided by RNS
The company news service from the London Stock Exchange
END
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