Aviva Plc reaped £318 million in the sale of 37 million shares of Dutch insurer Delta Lloyd. The deal, announced today, reduces Aviva’s stake in the company from 41% to below 20%.

Priced at £10.75 per share, the private sale was made to qualified institutional investors, according to a release from U.K.-based Aviva.

This disposition comes soon after executive chairman John McFarlane outlined a strategic plan to cut expenses by £400 million from its 2011 cost basis, and streamline the organization. In a written statement released Thursday, McFarlane said the company plans to “focus on fewer business segments where we believe we can produce attractive returns with a high probability of success.”

Although McFarlane declined to go into specifics about possible dispositions, he did pinpoint 16 non-care business segments that “will be exited.” Those included South Korea, U.K. large-scale bulk purchase annuities and small Italian partnerships.

No mention was made of the company’s U.S. arm, Aviva USA, which has been the subject of a possible sale for several months.

McFarlane said the company has no plans to raise new equity; instead, it will bolster its financial position through dispositions and reducing capital to businesses with lower returns.

McFarlane also stated the company continues with its search for a new CEO, with an appointment expected by early next year. Aviva’s previous CEO, Andrew Moss, stepped down in May after shareholders objected to executive pay packages.

The executive chairman further stated revamping the company will take 12 months and possibly extend into late 2013, with the full effect of the changes coming in 2014. The company “will remain largely positioned in developed markets, together with some additional growth markets,” McFarlane stated.

Of the 58 individual business units under review, 15 were classified as performing. These included operations in the U.K., Canada, Poland, Singapore and Turkey.

The company also targeted a capital level of between 160% and 175% of required capital. And in June, the company revealed it reduced its Italian Sovereign bond holdings by just under €2 billion.

McFarlane acknowledged that the current economic climate “makes our task more arduous. I do not, therefore, intend to make aspirational promises that we may be unable to keep. Instead, I would enlist [shareholder] support by articulating a realistic way forward as in the strategic plan announced today and take the necessary actions to execute it.”

In a written analysis of the new strategy, Barrie Cornes, insurance analyst with Panmure Gordon &Co. in London, gave Aviva a buy rating, saying the new strategy “could well prove to be the turning point for long-suffering shareholders.”

Cornes also wrote that he considered Aviva shares undervalued and are currently trading at a substantial discount to the U.K.-listed life peer group.

“Given the rock bottom valuation, we believe that this represents a very attractive entry point,” he said. “The shares will rally in the next 12 to 18 months even in flat markets,” Cornes stated.

Yet he predicted there will be a “high degree of volatility” in Aviva share prices.

“At times it may appear to be a question of two steps forward and one step back,” Cornes wrote. Aviva Plc shares were trading at 288 pence on the London Stock Exchange Friday, up 1.2% from the previous day.

Cornes noted that the Delta Lloyd stock sale demonstrates that the “turnaround strategy at Aviva is underway…and bodes well for the future.”

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