Aviva off-loading 40% stake in Turkish JV to Ageas in £122M deal

Ageas SA/NV unit Ageas Insurance International NV agreed to acquire Aviva PLC's entire 40% stake in its Turkish joint venture AvivaSA Emeklilik ve Hayat AŞ for about £122 million.

AvivaSA is a life insurance and pensions company listed on Borsa Istanbul with a market capitalization of 3.4 billion lira as of Feb. 22. In 2020, it reported a net result of 350 million Turkish lira, an increase of 36% from 2019, and a return on equity of 36%.

Aviva's joint venture partner, Sabancı Holding, will retain its 40% holding in AvivaSA, which offers products to over 2 million customers through bancassurance, tied-agents and direct sales.

Ageas said the investment fits its strategy to expand in regions in which it is already present and provides the opportunity to tap into low-penetrated and high-growth markets such as the Turkish life insurance market, which has been growing at 28% per year in the 2014-2019 period. It also allows Ageas to broaden the collaboration with Sabancı, its partner in the nonlife joint venture Aksigorta AŞ.

The impact on the Belgian insurer's solvency position at the time of closing is estimated to be around 3 percentage points, while the deal is expected to increase Aviva's IFRS net value and Solvency II surplus by approximately £100 million.

The transaction is subject to customary closing conditions, including regulatory approval, and is anticipated to close in 2021.

As of Feb. 23, US$1 was equivalent to 7.07 Turkish lira.