Aviva Confirms Interest in Buying US Rival AmerUs

Strategic Insights -

Aviva, the UK's largest insurer, has confirmed its interest in buying US life assurer AmerUs, a deal that would give it a significant presence in the American market. The proposed acquisition, valued at around £1.25 billion, comes just four months after Aviva failed to land UK business Prudential, which has sizeable transatlantic interests. Aviva plans to fund the deal from a combination of internal resources, debt, and a share issue. AmerUs, a leading player in the life insurance and annuities markets, specializes in indexed annuities, a retirement savings product that offers returns linked to an underlying index.

Key Takeaways:

  • Aviva has confirmed its interest in buying AmerUs, a US life assurer, in a deal valued at around £1.25 billion.
  • The proposed acquisition would give Aviva a significant presence in the American market, addressing its poor exposure to the US market.
  • Aviva plans to fund the deal from a combination of internal resources, debt, and a share issue.
  • AmerUs, a leading player in the life insurance and annuities markets, specializes in indexed annuities, a retirement savings product that offers returns linked to an underlying index.
  • Aviva currently has a "strategic foothold" in the US, with £2.6 billion of assets under management and 390 employees at Aviva Life Insurance Company and the Aviva Life Insurance Company of New York.
  • The proposed acquisition is consistent with Aviva's stated strategy of pursuing value-creating acquisition opportunities in key growth segments of the major global long-term savings markets.
  • Aviva's bid for Prudential was rebuffed in March, and the company has long said it wants to expand in the US, the world's biggest long-term savings market.
  • Analysts say the deal would give Aviva a stepping stone into the long-term savings market, expected to be given greater impetus by the imminent retirement of the baby-boomers.

Statistics:

  • £1.25 billion: the value of the proposed acquisition of AmerUs
  • £2.6 billion: Aviva's assets under management in the US
  • 390: the number of employees Aviva has in the US
  • 100 years: the number of years AmerUs has been in operation
  • 1997: the year AmerUs joined the stock market
  • £317 billion: Aviva's assets under management at the end of 2005
  • 2000: the year CGU and Norwich Union merged to form Aviva
  • 2002: the year Aviva changed its name from Norwich Union

Sources:

  • The UK's largest insurer Aviva yesterday confirmed its interest in buying US rival AmerUs in a deal that would address its poor exposure to the American market. (The UK's largest insurer Aviva yesterday confirmed its interest in buying US rival AmerUs in a deal that would address its poor exposure to the American market.)
  • Aviva confirmed speculation it was in discussions with AmerUs and said any deal would be funded from a combination of internal resources, debt and a placing of its shares. (Aviva confirmed speculation it was in discussions with AmerUs and said any deal would be funded from a combination of internal resources, debt and a placing of its shares.)
  • A statement from Aviva said: "These discussions are consistent with Aviva's stated strategy of pursuing value creating acquisition opportunities in key growth segments of the major global long term savings markets." (A statement from Aviva said: "These discussions are consistent with Aviva's stated strategy of pursuing value creating acquisition opportunities in key growth segments of the major global long term savings markets.")