(Bloomberg) — The Capital Group Inc., which was one of Aviva Plc’s 10 largest investors, cut its holdings 70 percent since the U.K. insurer revealed plans to buy Friends Life Group Plc for 5.6 billion pounds ($8.8 billion).
The asset manager, which increased its Aviva stake to more than 4 percent as recently as October, started to sell shares on Nov. 24, three days after Britain’s second-largest insurer by market value confirmed it was in takeover talks, regulatory filings show. The Los Angeles-based firm continued to sell in December and now owns 1.1 percent, or about 32.1 million shares, according to a filing today.
Aviva this week agreed to buy Friends Life for 394 pence apiece in an all-stock transaction, set to be the U.K. insurance industry’s biggest takeover in 15 years. Chief Executive Officer Mark Wilson said that while the deal had taken many by surprise, it was consistent with the London-based insurer’s strategy of growing the business and increasing cash flow.
“Cash flow is what our investors signed up for,” he told journalists on a conference call Dec. 2. “If an opportunity comes up that delivers cash flow, we should consider it. In my view, it would be imprudent not to.”