Aviva bails on Woori
By Kim Jae-won
British financial company Aviva Group plans to sell its 47 percent stake in Woori Aviva Life Insurance to its business partner Woori Financial Group, Woori Financial said Friday.
“Aviva said that it will sell its stake in Woori Aviva due to financial reasons,” said an official of Woori Financial on condition of anonymity.
Aviva is under pressure to slim down due to poor performances amid the eurozone debt crisis. The world’s sixth-largest and the biggest insurer in the United Kingdom considers selling its divisions in the United States and Taiwan.
The Woori official said that Aviva and Woori will negotiate on the stock price based on the company’s assets and other financial documents. According to the Financial Supervisory Service (FSS), Woori Aviva had 3.2 trillion in total assets as of December.
Woori Aviva reported net profit of 4.5 billion won for nine months from April to December 2011. The company’s 2011 fiscal year ended in March, but the results are not available yet.
Aviva is the second-largest shareholder of Woori Aviva having a 47.3 percent stake, while Woori Financial is the No. 1 shareholder with a 51.9 percent stake.
Woori and Aviva have been working together since April 2008 after acquiring LIG Life Insurance. The Busan-based insurer has 48 branches and 1,900 employees. Its capital reached 73.7 billion won in December.
Some experts say that Aviva’s exit will help Woori accelerate its plan to strengthen in the insurance sector. It is seeking to enlarge Woori Aviva to make the group’s portfolio more diversified.
The holding company also plans to expand its presence in the life insurance market, where the three big players of Samsung, Kyobo and Korea have more than a 70 percent market share.
Aviva’s exit plan is the latest restructuring move by European financial companies. U.K.-based banking giant HSBC also announced last month that it is under negotiation with Korea Development Bank to sell its retail banking unit in Korea, which has 11 branches nationwide.