Aviva Plc is selling its entire shareholding in life insurance and pensions joint ventures Cajamurcia Vida and Caja Granada Vida de Seguros y Reaseguros SA to Bankia SA for a total consideration of €202 million.
Cajamurcia Vida is a joint venture between Aviva and Banco Mare Nostrum SA, which was acquired by Bankia in 2017, while Caja Granada Vida is 25%-owned by Aviva, according to data from S&P Global Market Intelligence.
The British insurance group said Feb. 23 that the consideration represents 2.1x of its share of the businesses' net asset value under International Financial Reporting Standards and 22.5x of its share of their earnings. Aviva expects the transaction to result in an increase of roughly £150 million in its capital surplus under the Solvency II regime.
After completion of the sale, Aviva will retain a stake in a small life insurance operation, Pelayo Vida, and a residual support center in Spain.
Aviva sold its shareholdings in its Spanish joint ventures to Bankia in 2012 and Novacaixagalicia Banco in 2014. In 2017, Aviva sold the majority of its remaining businesses to Santa Lucía SA, Compañía de Seguros y Reaseguros. These, along with the newly announced sale, result in combined proceeds of €1.6 billion, it noted.
Separately, Bankia said the transaction would not have a material impact on the group's financial statements or solvency capital ratios.