LONDON, 15-4-2014 — /EuropaWire/ — Aviva plc (“Aviva”) today announces that it has reached agreement to sell its entire 47% stake in its South Korean business Woori Aviva Life Insurance (“WALI”) to NongHyup Financial Group (“NHFG”). WALI is majority owned by Woori Financial Holdings Company Limited (“Woori”), which has also agreed to sell its stake to NHFG as part of this transaction.
The agreement is consistent with Aviva’s strategy to focus on markets where it has scale or a sustainable competitive advantage to maximise return on capital. The transaction will have a neutral impact on the Group’s IFRS net assets and will increase economic capital surplus by £0.2bn, recognising the reduced exposure to interest rate and credit risk.
The sale of WALI is part of a broader privatisation of Woori by the Government of South Korea.
The sale is subject to regulatory approval.
Khor Hock Seng, Chief Executive of Aviva Asia, said:
“Aviva has a strong presence in China and South East Asia, which are key future cash generators for the group. This deal provides further focus to our Asian businesses, which increased value of new business by 65% in 2013.”
In January 2014 Aviva signed a joint venture agreement with Astra International, Indonesia’s largest conglomerate¹, further underlining its commitment to selected markets in Asia.
¹The agreement is subject to local regulatory approval
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- Value of new business of Aviva Asia for the year ended 31 December 2013 was £91m (FY12: £55m) (excluding Malaysia and Sri Lanka)
- Woori Aviva Life Insurance was established in 2008 following an agreement between Aviva and Woori Finance Holdings Company Ltd
- WALI distributes life insurance products through Woori Financial Holdings distribution network of over 1,300 branches across 16 provinces and a sales network of over 1,600 tied agents and 138 agencies along with 51 WALI branches
- Woori was established as South Korea’s first financial holding company in April 2001
- Its businesses include Woori Bank (South Korea’s second largest commercial bank), two regional banks (Kwangju Bank and Kyongnam Bank), Woori Investment & Securities, one of leading security firms, Woori Card, Woori Aviva Life Insurance, Woori FG Savings Bank, Woori Investment Bank, Woori F&I, Woori Asset Management, Woori Finance Information System, Woori Private Equity, and Woori Finance Research Institute
- Woori serves more than 23 million customers and employs about 28,000 employees, over a network of more than 1,500 domestic and worldwide branches
- NHFG was first launched in 1961 as a cooperative to improve the social and economic status of farmers in South Korea. NHFG provides education, training, marketing, banking and insurance services to the agricultural industry and rural communities in South Korea
- In March 2012, NHFG was restructured as one of South Korea’s largest financial group with banking, insurance, securities, future and asset management businesses