Aviva looks to sell FPI

UK based insurer Aviva PLC is looking to sell Friends Provident International Ltd. (FPI), its unit that serves high-net-worth clients in Asia and the Middle East, in a deal that could fetch up to USD750 million, according to close sources.

Aviva’s sale of Friends Provident International comes less than two years after it bought the business in April 2015, as part of a GBP5.6 billion (USD8.8 billion) deal to acquire Friends Life Group Ltd., which at the time created the U.K’s largest insurance, savings and asset-management company.

Based in the Isle of Man, a self-governing island situated between the UK and Ireland that many consider a tax haven, Friends Provident International provides life assurance and investment products to global expatriate and domestic affluent customers in Hong Kong, Singapore, United Arab Emirates and other selected markets.

Aviva said in its full-year 2016 financial report that Friends Provident International is under strategic review. The insurer sees little growth in the unit, whose main clientele are British expatriates, analysts say. Aviva’s gross operating profit in Asia dropped four percent year over year in 2016, compared with a 12 percent increase in gross operating profit globally.

Aviva has received a number of pre-emptive offers for the unit, although a formal bidding process hasn’t started, the people said. Chinese conglomerates Fosun Group and HNA Group are among those evaluating the unit, according to two of the people. Both companies declined to comment.

A spokeswoman for Aviva said there is no update on the review and declined to comment further. Goldman Sachs Group Inc. is running the sale, people familiar with the situation said. The bank declined to comment, according to a report in the Wall Street Journal.