In its just released Q3 management statement, Aviva PLC said it is close to selling its U.S. life and annuity business. However, the company also stated the sale will most likely come at a “substantial discount” to book value.
In the statement co-signed by chairman John McFarlane and CFO Patrick Regan, the company noted that even a discounted sale would produce a capital surplus. “We are hopeful of a satisfactory resolution reasonably soon,” they wrote. A report from Bloomberg Businessweek put the book value of the U.S. unit at £2.4 billion, or $3.8 billion.
Discussions are ongoing and the company release didn’t specify any suitors by name. Published reports have speculated on interested parties that may include Guggenheim Partners.
A spokesperson for Aviva USA said the company was not in a position to comment any further.
Since midyear, the U.K.-based insurer has plotted a course to dispose of non-core business lines and lower expenses. In July it reduced its share of Dutch insurer Delta Lloyd and cut its holdings of Italian sovereign debt. The company continues on its search for a new CEO as well. Earlier this year, Andrew Moss resigned and was replaced on an interim basis by McFarlane.