Aviva has approved the sale of its French Business for EUR 3.2 billion in cash to Aema Groupe in order to follow its strategic transformation and focus on the strongest businesses in the UK, Ireland and Canada.

Amanda Blanc, Chief Executive Officer of Aviva, said:"The sale of Aviva France is a very significant milestone in the delivery of our strategy. It is an excellent outcome for shareholders, customers, employees and distributors. The transaction will increase Aviva's financial strength, remove significant volatility and bring real focus to the Group. Aema Groupe has a strong heritage in the French insurance industry and this transaction will propel it to a top 5 position in the French market. I am confident Aema Groupe will be an excellent owner of Aviva France."

The transaction is subject to consultation and customary conditions, including regulatory approvals, and is expected to complete by the end of 2021 and will reduce the volatility in the Group's solvency ratio by removing exposure to interest rate risk from the Eurofonds guaranteed life insurance product.

The transaction covers the French life, general insurance, and asset management businesses and the (75%) shareholding in UFF ("Aviva France"). A further update will be provided with Aviva's results on 4 March 2021, however the estimated financial impact on Aviva as at 31 December 2020, is:

• Increase of Solvency II capital surplus by c. GBP 0.8 billion and Solvency II cover ratio by c. 22%
• Increase of excess capital above 180% Solvency II cover ratio by c. GBP 2.1 billion and centre cash by c. GBP 2.8 billion
• Reduction in IFRS net asset value of c. GBP 0.5 billion

Aviva will use part of the cash (up to GBP0.5 billion) to accelerate repayment of some of the Group's internal loan with Aviva Insurance Limited. Moreover, Aviva expects to use the increased capital and cash to support its previously communicated capital framework of debt reduction, investment for long-term growth and return of excess capital to shareholders.