LONDON (Reuters) - Aviva (AV.L), Britain’s second-biggest insurer, has begun to exit more than a quarter of its businesses by selling half its stake in Dutch rival Delta Lloyd DLL.AS for 318 million pounds ($494 million).
Aviva sold 37 million Delta Lloyd shares at 10.75 euros ($13.31) each, it said on Friday, one day after unveiling a program of disposals and cost cuts aimed at appeasing investors irked by its flagging share price.
Aviva shares were up 3.4 percent at 5.55 a.m. EDT, making the company the biggest riser in the Stoxx 600 European insurance index .SXIP, which was flat. Delta Lloyd shares were down 3.3 percent.
“We see this as early evidence of a new determination to re-focus the group on businesses that make a reasonable return,” Investec analyst Kevin Ryan wrote in a note.
Aviva acquired Delta Lloyd in 1973 but began offloading its 92 percent stake via an initial public offering in 2009 after an unsuccessful attempt to challenge corporate governance rules that limited its control over the Dutch insurer.
Aviva’s shares have lost about a third of their value in the past year, lagging a 10 percent decline for the European sector.
The company’s weak stock market performance, which led to the removal of Chief Executive Andrew Moss in May, partly reflects concerns over its heavy exposure to the ailing euro zone, source of 40 percent of its profit last year.
($1 = 0.6443 British pounds)
($1 = 0.8077 euros)
Reporting by Matt Scuffham and Myles Neligan; Editing by Erica Billingham