British insurance group Aviva has just announced its intention to pay out over £4 billion to its shareholders, or €4.7 billion. The insurer has been in the process of refocusing since August 2020, and now counts Swedish activist fund Cevian among its shareholders.
Cevian fund puts pressure on Aviva Group
In June 2021, Swedish activist fund Cevian acquired a 4.95% stake in Aviva, the British insurance group headed by Amanda Blanc since July 2020. The group has carried out a number of asset disposals, enabling it to raise £7.5 billion.
Although Aviva had announced its intention to pay its shareholders their share, the insurer had remained vague as to the amounts envisaged. Under pressure from the Cevian fund, the figures are now known: "at least" £4 billion, or a minimum of €4.7 billion, will be paid out to shareholders by the end of June 2022.
Acknowledging the Group's good results since the reorganization was launched 12 months ago, Aviva CEO Amanda Blanc announced her intention to honor her commitment by returning a significant portion of this capital to shareholders.
A vast reorganization operation
Cevian said it was satisfied with the announcement, although it stressed its desire to obtain a higher payment, of up to £5 billion, by the end of 2022. A meeting between Aviva's CEO and representatives of the Cevian fund is scheduled in the coming days.
Over the past year, the British insurance group has embarked on a far-reaching strategy to refocus its activities on three markets: the UK, Canada and Ireland. At the same time, it has withdrawn from several international markets, including France and Asia. Aviva has sold its business in Poland and its non-life insurance business in Italy to Allianz, and its life insurance business in Italy to CNP Assurances.
Aviva is also in the process of reducing its costs, which should total around £300 million by 2022.
Following the announcement of a payout of over £4 billion to its shareholders, Aviva shares gained 4.4% on the London Stock Exchange on August 12, one of the biggest rises in Europe.