Aviva to sell 15% of Delta Lloyd

Aviva has revealed plans to sell 15% of the share capital of Dutch financial services firm Delta Lloyd, cutting its stake to 43% from 58%.

The insurer said the cash proceeds would strengthen its balance sheet.

The announcement closely follows last months news that Aviva is planning to sell its stake in breakdown recovery and insurance firm RAC.

The 25m Delta Lloyd shares will be disposed through a private placement. The price will be determined after an accelerated book-building process, which started today. The amount comprises 14% of delta Lloyd's voting rights.

Settlement of the transaction is subject to approval by Aviva's shareholders, who will vote on the deal at an extraordinary general meeting on 4 May. Following the transaction. Aviva will hold 71.5m Delta Lloyd shares, equivalent to 40% of the Dutch firm's voting rights.

Aviva said the offering furthers its strategy of prioritising investment in the 12 markets where it deems itself strong, which do not include the Benelux region.

“This is an important step in delivering our strategy," said Aviva group chief executive Andrew Moss in a statement. "Reducing our shareholding in Delta Lloyd will not only enhance our liquidity and further strengthen our balance sheet but is also consistent with our focus on pursuing profitable growth in markets where we have strength and scale.”

Because Aviva will own less than 50% of Delta Lloyd's voting rights following the transaction, it will no longer be able to consolidate the results of the company into its own. Had the transaction occured on 31 December last year, it would have reduced Aviva's IFRS operating earnings per share by 4% to 53.1p from 55.1p and its consolidated IFRS assets by £58bn to £312bn from £370bn.