NAB acquires Aviva Australia for AUD$925m.

Aviva, has announced the sale of Aviva Australia Holdings Ltd, its Australian life and pensions business and wealth management platform – ‘Aviva Australia’, to the National Australia Bank (NAB).

NAB is Australia’s largest bank, and the purchase supports it strategy of building up its wealth management, insurance and advisory business, and supports its outline strategy.

NAB Chief Executive, Cameron Clyne commented: “This acquisition will enhance our offering in key wealth management segments including insurance and investment platforms, adding scale, efficiency and new capabilities to our operations.”

Aviva, the world’s fifth largest insurance group, intends to retain some of its interest in Australia, as it excludes its ‘Aviva Investors’ operation from the sale process. Hoping to benefit from the continued growth of the pension’s arena, Aviva said it “remains committed to the Australian market”.

The sale is expected to raise in the region of AUS$925 million (£452m) on completion, with a further AUS$40m representing a dividend to be paid by Aviva Australia prior to completion.

Andrew Moss, Aviva CEO, said: “This transaction realises excellent value for Asia shareholders at around 16 times 2008 net earnings and demonstrates the underlying value of our business.

“It gives us greater financial flexibility and we can redeploy the capital to other markets which we believe will deliver better returns to our shareholders over the next few years.”

The sale is subject to regulatory approval and is expected to be completed during the third/fourth quarter of 2009.