Aviva has sold 50 per cent of its shareholdings in Spanish life insurance and pension joint ventures, as part of a strategic review of its operations in the country.
The FTSE 100-listed insurer sold part of its stakes in Unicorp Vida, Caja Espana Vida and Aviva Vida y Pensiones, for a total consideration of €475m (£399m). Shares in the company were up one per cent at the open.
The group said the transaction was "in line with Aviva's strategy of allocating capital to markets where it can deliver higher returns".
According to the company, the consideration represents approximately 1.5 times Aviva's share of the 2016 IFRS net asset value and 12 times Aviva's share of 2016 earnings after tax of these businesses. The insurer also said the transaction will result in a gain of approximately £120m in Aviva's IFRS net asset value and an increase of approximately £130m in Aviva's Solvency II capital surplus.
"This is a strong outcome for Aviva," said group chief executive Mark Wilson.
"The consideration of €475m is an attractive valuation and the sale further simplifies the group. It highlights our absolute focus on allocating capital effectively across the group and further strengthens our capital and liquidity position."
Aviva recently announced a major restructuring in order to avail of "significant opportunities to differentiate (the) business in the UK post-Brexit".
The insurer is currently under pressure from an activist investor to ditch its asset management arm, worth £345bn.