Insurance giant Aviva has unveiled plans to restructure its life joint ventures in Italy, in a bid to simplify what is currently a complex structure.

The FTSE 100 group has two joint ventures with UBI Banca, one 50% owned by Aviva and the other 50% owned by Aviva S.p.A., which is a joint venture between UniCredit and Aviva. In addition, Aviva S.p.A. owns minority equity investments in three of UBI Banca's subsidiary banks.

Under a new deal with UBI, Aviva will increase its holding to 80% of the joint ventures that offer products to UBI Banca customers, with UBI Banca owning 20%, while Aviva's distribution agreement with UBI will be extended from 2015 to 2020, focused on savings and life protection products.

Aviva S.p.A. will also sell the minority equity investments to UBI Banca meaning that the indirect relationship between UniCredit and UBI Banca will be decoupled.

Aviva S.p.A., which will continue to be owned 51% by Aviva, will enter into a new five-year distribution agreement with UniCredit offering selected products, and increased capital efficiency, the group explained.

Aviva will make a balancing payment of approximately £25m to fund the transaction, which is expected to be broadly neutral to Aviva's economic capital and IFRS net asset value at completion.

David McMillan, the Chief Executive Oficer of Aviva Europe, said: "This is an important step in the turnaround of our Italian business. Together with the sale of our stake in Eurovita, this transaction will simplify the structure of Aviva in Italy, increase value of new business and improve our capital efficiency."

NR

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