Aviva has told its institutional shareholders in private meetings that it will not make acquisitions in the near term, The Mail on Sunday has learned.
The FTSE 100 insurance giant told one top 20 investor that it would focus on finishing the sale of underperforming arms and growing its UK, Irish and Canadian businesses.
The investor said: ‘They were very quick to point out they weren’t planning to do any acquisitions at this stage because they’re still in the divestment phase.’
Focus: Aviva told one top 20 investor that it would focus on finishing the sale of underperforming arms and growing its UK, Irish and Canadian businesses
Scrutiny of Aviva’s finances has ramped up since it emerged in June that activist investor Cevian Capital, one of Europe’s largest activists, had taken a stake in the business. A source close to Aviva said there were no short-term plans for acquisitions, but ‘it’s a possibility in the future’.
Chief executive Amanda Blanc said last month that investment in the business, ‘will be both organic and potentially through strategic bolt-on acquisitions’.
Cevian is pressing Aviva to hand £5billion to shareholders, cut £500million of costs, and increase the annual dividend to 45p. Aviva said last month it would hand back at least £4billion by next summer – and has started buying back £750 million of shares. It has sold off businesses around the world worth £7.5billion under Blanc.
Niko Pakalen, a partner at Cevian, said at the time that it was a ‘good start’, but ‘would not be enough’ on its own.
Aviva declined to comment.
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