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Allianz Buys Aviva’s Polish Business For $2.9 Billion


03/26/2021


Allianz Buys Aviva’s Polish Business For $2.9 Billion
The previously announced program to sell European and Asian assets which was started last year by the British insurer Aviva continued as the company said on Friday that it had sold its Polish operations to Germany’s Allianz for 2.5 billion euros ($2.94 billion) in cash.
 
There was a bid for the business from Italy’s Generali and Dutch insurer NN, according to report quoting information from sources, which was overcome by the Allianz offer for the business that was up for sale.  
According to the new strategy of Aviva taken under the new boss Amanda Blanc, who joined the firm as CEO in July 2020, the company has set a strategy of focusing on the its core business of general insurance in Britain, Canada and Ireland and as a means to achieve that target the company has been selling off its assets at a fast pace. Aviva also has joint ventures in China and India.
 
“The sale of our Polish business is an excellent conclusion to the refocusing of our portfolio announced just eight months ago,” Blanc said, adding that the sale of the eight businesses would generate 7.5 billion pounds ($10.31 billion) in cash.
 
Allianz, which first entered the Polish market in 1997, is Europe’s biggest insurer.
 
“We are delighted to further strengthen visibility of the Allianz brand in Central Eastern Europe and pursue our successful growth strategy in the region,” Allianz CEO Oliver Baete said in a separate statement.
 
Following the completion of the deal, the company would become the number one company in central and eastern Europe in terms of operating profit. There are a number of other businesses of the company in the region which includes in Russia and Ukraine.
 
Allianz added that the deal will increase the standing of the company to number five in gross written premium in Poland.
 
Aviva’s selling spree will bring in bumper cash pay-outs, investors are hoping.
 
Citing “an attractive capital return/restructuring story”, Aviva was described as one of its key overweight insurance stocks in Britain by JPMorgan Cazenove analysts.
 
Earlier this week, three bidders for the business were given an opportunity to improve binding bids that were submitted on Monday, according to reports quoting sources, and the ultimate sale price for the business of the company in Poland topped the expectations of analysts.
 
Aviva said in a statement that Santander’s minority stake in the Aviva Poland business is also being purchased by Allianz which would bring the total value of the transaction to 2.7 billion euros. The company added that a 49 per cent holding in the business’s life and general insurance joint ventures will remain with Santander even after the deal.
 
(Source:www.bloomberg.com)