Aviva offloads its Australian life unit

INSURANCE giant Aviva last night announced that it is to sell Aviva Austalia Holdings, its Australian life and pensions business and wealth management platform, to National Australia Bank (NAB).

Aviva is expected to pocket A$925m (£452m) from the deal. The group will gain A$825m cash consideration from NAB on completion, with a further amount of A$40m representing a dividend to be paid by Aviva Australia prior to completion, and a forecast amount of A$60m representing a net asset adjustment to be paid post completion.

Aviva chief executive Andrew Moss said: “This transaction realises excellent value for Aviva shareholders at around 16 times 2008 net earnings and demonstrates the underlying value of our business.”

The group said its decision to sell was based on the belief it would be difficult to reach a leading position in an increasingly consolidated market.