Macif Emerges as Favorite to Buy $3.6 Billion Aviva France Unit

Jan-Henrik Förster, Sonia Sirletti and Aaron Kirchfeld

(Bloomberg) -- French mutual insurer Macif has emerged as the frontrunner to acquire Aviva Plc’s insurance operations in the country, according to people familiar with the matter.

Macif is seen as the most suitable buyer because it’s a local player, the people said. The unit could fetch more than 3 billion euros ($3.6 billion), according to the people, who asked not to be identified because the information is private.

The company is competing against French private equity firm Eurazeo SE, said the people. Eurazeo was a latecomer to the auction and there could be some hesitation to sell to private equity, they said.

For Macif, a purchase of Aviva France would be its biggest-ever deal. Eurazeo has been holding talks with Italy’s Assicurazioni Generali SpA about potentially teaming up, the people said. Eurazeo, one of Europe’s few listed buyout firms, sees Aviva France as a strategic investment that would elevate its 18.8 billion euros in assets under management, according to one person. Eurazeo, led by Virginie Sarah Morgon, has a market value of 4.9 billion euros.

A consortium of Allianz SE and Athora has been sidelined due to resistance to the latter firm’s links to American private equity, the people said.

Private equity firms buy life insurers to attract permanent capital in a bid to diversify from buyout strategies. They invest the cash flows from policies into illiquid assets to boost returns and cut costs by boosting scale.

Aviva, which hasn’t yet decided on a winner, could reach an agreement as early as this month, the people said. The French business generated 13.4 billion pounds ($18.5 billion) of revenue in 2019, about 20% of the group’s total, according to data compiled by Bloomberg.

The sale is part of Aviva Chief Executive Officer Amanda Blanc’s plan to improve the London-listed insurer’s struggling share price by offloading non-core assets. Blanc has wasted little time since taking the helm in July, agreeing to sell a majority stake in its Singapore business for about $2 billion and pushing ahead with the disposal of its units in Poland and Italy. She’s also exploring options for Aviva’s joint venture in Turkey. In total, Aviva could raise around 6 billion euros with the disposals of France, Poland and Italy.

Italy Sale, Poland

Allianz, Generali and Dutch insurer NN Group NV are among parties that expressed interest in the Polish business, which could fetch about 1.5 billion euros to 2 billion euros, the people said.

Representatives for Allianz, Athora, Aviva, Eurazeo, Generali and Macif declined to comment. A spokesperson for NN couldn’t immediately be reached.

Meanwhile, Aviva has initiated talks with French insurance group CNP Assurances as well as Allianz, Germany’s biggest insurer, to sell its Italian operations, people familiar with the matter said. CNP is said to be lined up for the life insurance business, while Allianz would buy the general insurance portion, they said. Aviva declined to comment on the details. A deal could be reached within a few weeks, the people said.

Mergers and acquisitions in the European insurance industry are being driven by companies looking to bulk up their property and casualty businesses while selling interest-rate dependent life units. Insurance deals worth $64 billion have been struck in the region during the last 12 months, according to data compiled by Bloomberg. That’s up 53% year-on-year, the data show.

(Updates with talks for Italian operations in 11th paragraph, background)

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