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Aviva finalises £1.5bn sale of its Singapore business

Multinational insurance firm, Aviva plc (LON:AV) announced on Monday that it had completed the sale of a majority shareholding in Aviva Singapore to a consortium headed up by Singapore Life Ltd.

The company will be renamed ‘Aviva Singlife Holdings Pte Ltd’. The transaction was completed for a total consideration of SGD 2.7 billion (£1.51 billion), comprised of SGD 2.0 billion in cash and securities, SGD 250 million in vendor finance notes and a 26% equity shareholding in Aviva Singlife.

The group said that as per its Q3 announcement, the cash proceeds from the Singlife transaction will be put towards reducing the company’s debt. With the deal first confirmed on September 11 2020, the company’s statement on Monday added:

“This is the third transaction Aviva has completed so far this year and follows the recent announcement of the sale of our entire shareholding in Aviva Vita S.p.A., an Italian life insurance joint venture. Aviva continues to work at pace, taking decisive actions on its portfolio to transform the company for the benefit of its shareholders.”

Following the news, the company’s shares rallied modestly, up by 0.68% or 2.20p, to 326.30p a share 30/11/20 12:20 GMT. This is just shy of its post-lockdown high of 337.80p posted last week, and around 13.5% short of analysts’ target price of 369.82p a share.

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Analysts currently have a consensus Buy rating on the stock, while the Marketbeat community has a 62.94% “outperform” stance. Its stock looks to be undervalued, with a p/e ratio of 5.24 comfortably below the financial sector average of 20.91.