An agreement has been reached on the disposal with its joint venture partner HBOS plc. Aviva and HBOS are now in discussions to agree a ‘fair market value’ for LVL that could lead to the sale of Aviva’s interest in the joint venture to HBOS.
Aviva acquired the 50% stake in LVL as part of its acquisition of RAC earlier this year.
Aviva says the sale of its stake in the LVL joint venture will have no impact on the cost savings Aviva stated it would achieve as a result of integrating the RAC business into Norwich Union.
In fact it says that it will exceed the cost savings target of £80 million per annum forecast at the time of the acquisition and now expects to achieve savings of £100 million per annum in 2006.
Aviva will present full details and further developments in its general insurance business in a seminar for investors and analysts on October 18 at Park Royal, London.
Speakers will include Patrick Snowball, executive director of Aviva with responsibility for the group’s general insurance portfolio, Andrew Moss, group finance director of Aviva, Mark Hodges, managing director of Norwich Union General Insurance and Simon Machell, managing director of RAC.