Aviva is to sell its US life and annuities and related asset management business Aviva USA Corporation to life insurance holding company Athene Holding for $1.8bn (£1.1bn).
Aviva will retain the North American asset management activities of Aviva Investors focused on third parties, and Aviva plc assets outside of the USA.
The company says the deal is part of its strategy to narrow its focus on markets where Aviva can generate better returns.
Aviva will receive sale proceeds of $1.55bn (£1bn) in cash, after the repayment of external debt. Of this, up to $250m may be received as an interest-bearing vendor loan, which is repayable in cash within 12 months of completion of the deal.
Aviva USA made an IFRS pre-tax operating profit of £223m in 2011 and held £3.2bn in net assets and £39bn in total assets as at 30 June, 2012. It has over 930,000 customers and employs 1,800 people.
Life insurance holding company Athene Holding is focused on the retirement market and issues and reinsures fixed and equity indexed annuities through its subsidiaries.
Aviva chairman John McFarlane says: “The sale of Aviva USA is an important step forward in the delivery of our strategic plan. It considerably strengthens Aviva’s financial position, increases group liquidity and improves our economic capital surplus whilst also reducing its volatility.”
The deal is expected to be completed next year subject to regulatory approval.