AV. Aviva Plc

By Razak Musah Baba

LONDON--Aviva PLC (AV.LN) is selling Friends Provident International Ltd. (FPIL) to RL360 Holding Co., a subsidiary of International Financial Group Ltd., for up to 340 million pounds ($437.9 million).

The insurer said Wednesday that following a strategic review of FPIL, it has concluded that the business isn't central to the group's strategy to focus on a small number of markets where it has scale and profitability or a distinct competitive advantage.

Aviva said the sale will create a loss on disposal of GBP130 million, which is primarily due to the intangible assets held on Aviva's balance sheet arising from Aviva's acquisition of FPIL in 2015.

In 2016, FPIL made a loss after tax of GBP2 million and didn't remit any cash to Aviva. As a result, a disposal of FPIL is expected to be positive to Aviva's cash dividend paying capacity, Aviva said.

The transaction is subject to customary regulatory approvals and is expected to complete in early 2018.

-Write to Razak Musah Baba at razak.baba@wsj.com; Twitter: @Raztweet

(END) Dow Jones Newswires

July 19, 2017 02:36 ET (06:36 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.