Aviva : Sells Italian JV to Banco BPM

29 September 2017

AVIVA SELLS ITALIAN JV TO BANCO BPM

Aviva today announces that it has agreed to sell its entire[1]shareholding in its joint venture in Italy, Avipop

Assicurazioni S.p.A. ('the JV'), which includes its wholly owned subsidiary Avipop Vita S.p.A., to Banco BPM S.p.A[2]('Banco BPM') for a consideration of €265m (£233m[3]), payable in cash upon completion.

This agreement follows a notification received by Aviva of Banco BPM's intention to not renew its distribution agreement with Aviva and Aviva's subsequent decision, announced on 25 August 2017, to exercise its put option. Aviva formed a bancassurance partnership in protection and general insurance with the former Banco Popolare in 2007. As is customary in bancassurance arrangements, the original agreement between Aviva and Banco Popolare included an option for Aviva to sell its entire shareholding to the bank in the event of a termination of the distribution agreement.

The consideration represents 27.1 times Aviva's share of 2016 earnings after tax[4]and approximately 1.1 times Aviva's share of the IFRS net asset value[5]of the business. The transaction increases Solvency II

capital by approximately £0.2bn.

The transaction is subject to regulatory approval and is expected to complete in 2018. Aviva's other Italian operations are unaffected by this transaction. At full year 2016 Aviva Italy ranked as the 7 largest insurance group in Italy benefiting from well-diversified distribution including partnerships with UBI Banca, Unicredit, Banca Popolare di Bari, a strong and growing franchise with IFAs and a distribution network of over 500 multi tied agents.

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Notes to editors:

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