Aviva in sell-off to boost finances and share price
The FTSE 100 insurer is hive off or shut 16 underperforming business units
By CFOWorld staff | CFO UK | Published 12:30, 05 July 12
Aviva is to hive off or shut 16 underperforming assets as part of a strategic overhaul in a bid to strengthen its finances and boost its share price.
Its South Korean arm and its UK large-scale bulk purchase annuity unit are some of the businesses the insurer is considering selling or closing.
The insurer, whose weak stock market performance led to the removal of chief executive Andrew Moss in May, said it had identified a further 27 businesses which "require significant improvement", including its Irish general insurance arm.
The disposal plan is the culmination of a two-month scrutiny of Aviva's 58 businesses launched by executive chairman John McFarlane, who took day-to-day control of the group after Moss quit on 8 May.
"Things are tough and the environment is challenging. However, I am confident we will be successful," he said in a statement.
Aviva's shares closed at 281 pence on Wednesday, valuing the group at about £8.3 billion. The stock has fallen 35 percent in the past year, against a 10 percent decline in the Stoxx 600 European insurance share index.
photo credit: Reuters
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