Aviva Italia Holding has exercised an option to divest its entire 50% stake in its Italian joint venture (JV) in Italy, and its subsidiary Avipop Vita (AV), to Banco BPM.
Aviva has entered into bancassurance partnership with the former Banco Popolare in protection and general insurance in 2007.
The JV Avipop Assicurazioni, is owned by Aviva and Banco BPM. Together with AV, it distributes life and general insurance products in Italy through Banco BPM’s bank branch network.
In 2016, the two businesses contributed £0.2bn to Aviva’s IFRS net assets and produced nearly £14m IFRS operating profit before tax.
On 29 June 2017, Banco BPM sent a notification to Aviva stating its purpose to not renew its bancassurance agreement with Aviva.
Subject to customary bancassurance arrangements, the original agreement between Aviva and Banco Popolare incorporated an option for Aviva to sell its entire shareholding to the bank in the event of a termination of the distribution agreement.
Depending upon the terms set out in the shareholders’ agreement, the value of the put option will be decided and publicized.
Aviva’s JVs in Italy with UBI, UniCredit including other business units Aviva Life and Aviva Italia are unaffected.
Aviva International Insurance CEO Maurice Tulloch said: “This transaction will realize value for Aviva shareholders and will allow us to invest further in our future growth. Aviva has momentum in Italy and I am confident about our prospects.
Aviva Italia offers general insurance products which include life, protection, motor, home and personal and commercial lines to more than 2m customers.
Image: Aviva to sell its Italian JV stake to Banco BPM. Photo: Courtesy of © 2017 Aviva plc.