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Aviva to sell South Korean, Sri Lankan businesses, says sources

IBR Staff Writer Published 25 May 2012

UK-based insurance company, Aviva is reportedly putting its South Korean and Sri Lankan businesses up for sale as part of its strategy to raise money to protect against its comparetively higher eurozone exposure.

Reuters reported the sources familiar with the matter as saying that the exits are part of a wider retreat from sub-scale Asian markets that could bring around $150m to the insurer.

Aviva's plans to sell its global underperforming businesses will help increase its capital base in wake of its exposure to the troubled euro zone, without specifying the countries it would exit.

The London-listed company entered South Korean market in 2008, after forming a joint venture with Woori Financial Holdings to acquire LIG Insurance for £73m ($115.3m).

The insurer also held informal talks with Woori to sell its nearly 41% stake in the venture to a South Korean partner and Woori is still reviewing the proposal, one of the sources told Reuters.

In Sri Lanka, Aviva is putting Aviva NDB Insurance, which generated SLR12.8bn ($99m) in revenue in 2011, on auction, with AIA Group Ltd, Prudential and Manulife Financial Corp as most likely bidders.

Aviva is also currently in process of exiting its Malaysian joint venture with CIMB and has hired Morgan Stanley to manage the sale process, expected to commence soon.

According to the sources, CIMB has even devised a list of six insurers it would like to partner.

Aviva is also exploring the possible sale of its loss-making Taiwan business, and has indicated China and India as among its core markets in Asia.