Shares in Aviva (LON:AV) have climbed into positive territory in London in today’s session, as the company inked a deal to buy Irish insurer Friends First. The move is set to make the London-listed group one of the biggest insurers in Ireland.
As of 12:45 GMT, Aviva’s share price had added 0.51 percent to 493.10p, slightly outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.14 percent higher at 7,425.57 points. The group’s shares have added just under seven percent to their value over the past year and are up by a little over one percent in the year-to-date.
Aviva snaps up Friends First
Aviva announced in a statement today that it had agreed to buy Irish insurer Friends First Life Assurance Company for €130 million (£116 million) in cash. The FTSE 100 company said that as a result of the deal, it stands to become one of the largest composite insurers in Ireland, with its market share in life insurance increasing to 15 percent, alongside its existing 15-percent market share in general insurance.
“Friends First is a natural fit for Aviva Ireland,” Maurice Tulloch, CEO Aviva International Insurance, commented in the statement, adding that the move made “sense financially, strategically and for our customers”.
The UK company further explained that the acquisition was in line with its strategy to allocate capital in markets where it has scale or competitive advantage. Aviva has been undergoing a shake-up which has seen the company withdraw capital from Spain and sell its shareholding in an Italian joint venture in recent months.
“This acquisition is just an example of Aviva consolidating its businesses wherein it is exiting small/low market share non-core businesses and is expanding in core markets where it already has a strong position,” JPMorgan Cazenove analysts said, as quoted by Reuters.