A month and a half after Aviva’s CFO said the company was willing to part with its life division at a discounted rate, Athene Holding Ltd., a Bermuda-based insurance holding company, has announced it will acquire Aviva’s U.S. annuity and life insurance operations, including Aviva Life and Annuity Company, based in Iowa, and Aviva Life and Annuity Company of New York.
Athene will acquire Aviva USA, which has approximately $56 billion of statutory admitted assets as of Sept. 30, 2012, for a purchase price of $1.55 billion. The transaction is expected to close in 2013, subject to customary conditions and regulatory approvals.
“With this acquisition, Athene is a leader in the fixed annuity space,” said James Belardi, CEO of Athene. “The purchase of Aviva’s U.S. annuity business will add significant scale to our retail sales and reinsurance operations and provides Athene with best in class operational capabilities.”
Upon closing, the combination of Aviva USA and Athene Holding’s primary U.S. operating subsidiary, Athene Annuity & Life Assurance Company, a Delaware-domiciled insurer focused on retail fixed and indexed annuity sales and reinsurance, will result in the second largest issuer of fixed indexed annuities in the United States.
Aviva USA, to be renamed Athene USA, will be the parent for Athene’s U.S. operations and will be headquartered in West Des Moines, Iowa.
Athene recently received a $621 million capital infusion in anticipation of the transaction and expects to have over $3.5 billion of combined statutory capital within its insurance company subsidiaries following the transaction. Athene, which is focused on becoming the leading U.S. fixed annuity company, is evaluating strategic options with respect to Aviva USA’s life insurance operations.
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