Aviva’s deal to sell its 25.9% stake in Singapore Life for £0.8bn in cash is a good bit of business, according to analysts at Citi.
The price represents 2.2 times UT1 (own assets) and 29 times PE based on the 2022 earnings contribution (£17m).
“Overall, we see this as a strong transaction given the attractive valuation, the release of capital and further simplification of the group.
“We expect questions to focus on the potential for additional capital return.
“Aviva notes that the disposal proceeds are considered part of the existing capital framework, where surplus capital is available for reinvestment in the business, bolt-on M&A, and/or additional return to shareholders.”