Aviva plc (LON: AV) said on Friday that it plans on withdrawing from Aviva Poland. The company announced a deal with Allianz SE to offload its entire stake in the Polish unit for £2.14 billion.
Allianz SE (ETR: ALV) closed the regular session at £182.19 per share on Friday. In comparison, the stock had started the year at a per-share price of £170 after recovering from a low of £115.30 per share in March 2020.
The Polish unit is currently worth £2.31 billion
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The European multinational financial services company said that it will also buy Banco Santander’s minority stake in Aviva Poland. The polish unit is currently worth £2.31 billion.
The agreement between the two companies is likely to close by March 2022 after receiving approvals from the regulatory and anti-trust authorities. The announcement on Friday marks Aviva plc’s eighth divestment of a noncore business since its announcement that it wanted to refocus its portfolio last year. In total, selling eight businesses, Aviva plc will generate a total of £7.5 billion in cash proceeds.
The FTSE 100 listed company also highlighted on Friday that it plans on using this cash for investments directed at long-term growth and to reduce debt. The excess capital, it added, will be returned to shareholders.
In separate news from the United Kingdom, luxury fashion house Burberry Group plc lost a Chinese brand ambassador as a backlash to Western accusations of abuses in Xinjiang.
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CEO Amanda Blanc’s comments on Friday
Chief Executive Amanda Blanc of Aviva plc commented on the news on Friday and said:
“Our strategic focus is now on our strongest businesses in the UK, Ireland and Canada where we have leading market positions and strong growth potential.”
Aviva plc had reinstated dividend payment in the last week of November as it expressed confidence that trading remained resilient in the first nine months.
Aviva shares that you can conveniently trade online via a range of user-friendly apps opened at 402 pence per share on Friday and closed the regular session at 400.9 pence per share after touching an intraday high of 407.85 pence per share.
Aviva performed fairly downbeat in the stock market last year with an annual decline of a little under 25%. At the time of writing, the London-based insurance company is valued at £15.75 billion and has a price to earnings ratio of 8.38.