Aviva confirms AmerUs interest |
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Fri, 07 Jul 2006 14:50
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LONDON - Aviva PLC, the UK's top insurer has confirmed that it is in talks to acquire US rival AmerUs Corp. The deal is worth £1.3 billion ($2.3 billion), according to current valuations.
Aviva was linked to AmerUs takeover in January this year, but denied rumors since it was busy truing for a merger with rival Prudential. That deal would have give Aviva access to the lucrative Asian and American markets, but it fell through since Prudential seemed reluctant. Aviva is the world's sixth largest insurance group and currently manages assets worth £317 billion. Any deal with Prudential would have been massive, but after that deal fell through, Aviva turned to AmerUs.
"A transaction, if agreed, is expected to be funded from a combination of Aviva's internal resources, external debt and a market placing of Aviva shares," Aviva said in a statement. "These discussions are consistent with Aviva's stated strategy of pursuing value creating acquisition opportunities in key growth segments of the major global long term savings markets."
AmerUs is reputed for its indexed long-term savings products, which include retirement products and life assurance. The American market is exploding with more and more people keen on these kinds of products. AmerUs also offers indexed life assurance and it makes sense for Aviva to snap it up. "If a transaction is agreed, any equity placing will be accompanied by an update on Aviva's current trading," Aviva said.
In May Aviva had announced a 26 percent rise in sales in the first three months of this year to £7.9 billion. Its international market grew by 21 percent during the same time.
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Aviva calls off bid on Prudential 