Aviva makes big move towards transformation

UK insurer  Aviva is set to commence a share buyback programme of its ordinary shares for up to a maximum aggregate consideration of £750 million, as part of its plan to return a significant amount of capital to its shareholders.

The company has entered into a non-discretionary agreement with Citigroup Global Markets to conduct the programme on its behalf and to make trading decisions under the programme independently of Aviva.

The shares acquired by Citi under the agreement will be sold on to Aviva and, to the extent permitted by law, such purchased shares will be cancelled.

Aviva stated that the purpose of the buyback is therefore to reduce Aviva’s share capital. The maximum number of shares to be acquired under the programme is 300 million and the programme is expected to complete by February 17, 2022.

Amanda Blanc (pictured), group chief executive officer of Aviva, said: “We are delivering on our commitment to make a substantial capital return to our shareholders. We intend to return at least £4 billion to investors by the end of the first half of 2022 (subject to regulatory and shareholder approvals, completion of disposals and market conditions), starting with a share buyback of up to £750 million."

"Buying back our shares will reduce our share count in line with our more focused group and create additional value for our shareholders as we transform Aviva’s performance,” she added.

Commenting on Aviva's capital plan, Moody’s analyst Brandan Holmes, said: “ Aviva’s capitalisation and overall financial profile will remain strong after the planned £4bn return of capital to shareholders, with sufficient financial flexibility and capital cushion to take advantage of organic growth opportunities that might arise in its core markets."

Holmes noted that the planned significant return of capital to shareholders "underscores management’s focus on strengthening its existing businesses and the limited remaining inorganic growth opportunities available in its core markets.”

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