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January 09, 2015 at 05:41 AM
(Bloomberg) — During Mark Wilson’s first week at Aviva Plc in London he stormed out of a meeting with top executives after growing frustrated with the lack of boardroom debate.
In the two years since, the chief executive officer sold units from Spain to Russia, cut the workforce and last month announced the biggest U.K. insurance deal in 15 years, the 5.6 billion-pound ($8.5 billion) purchase of Friends Life Group Plc. Almost half of the managers at that early meeting are gone, said people with knowledge of the events who requested anonymity.
“He’s clearly a very driven man with a clear vision, but I wouldn’t want to cross him,” said Robert James, a financial analyst at Old Mutual Global Investors in London, which holds Aviva shares. “He is extremely impressive and knows exactly what he is going to do.”
Now the New Zealander must persuade investors his purchase of Friends Life will prove more successful than the merger that created Aviva in 2000. That combination, between Norwich Union Plc and CGU Plc, failed to reward shareholders. The stock has fallen by about half since Aviva was formed, the worst performance among Britain’s three biggest insurers.
“The history of U.K. life integration is not particularly rosy,” said Matthew Preston, an analyst at Berenberg in London who rates Aviva sell. There are risks in merging two “big lumpy businesses” that hold policies dating back to the 1970s, he said.
Wilson, 48, declined to comment for this article. Aviva investors will probably vote on the Friends Lifepurchase by the end of March.
Wilson’s Deal
Friends Life, a smaller competitor with 300 million pounds of excess cash and 4 billion pounds of surplus capital, was open to Aviva’s advances after government changes to the retirement system earlier in the year thwarted its plans to boost annuity sales, people familiar with the transaction said.
Wilson began serious talks with Friends Life CEO Andy Briggs in the second half of the year and by November they reached an agreement, the people said.
“The insurance industry is not generally noted for its speed for doing things — then someone like Mark turns up,” said Clive Cowdery, 51, the founder of Friends Life. “This is very much his deal.”
Born in Rotorua, a district of about 65,000 people on the North Island of New Zealand, Wilson followed his father and grandfather into the insurance business after earning a degree in management studies from The University of Waikato.
‘More Attractive’
He surprised investors and many of Aviva’s almost 28,000 employees when he announced the takeover talks in November, saying the all-stock purchase will boost cash flow, reduce debt and lead to cost reductions.
