The company acquired the Lex stake as part of its massive takeover deal of the RAC in March this year.
The remaining 50% of Lex is owned by banking firm HBOS, which has exercised an option under the joint venture agreement that will lead to Aviva disposing of its stake in the vehicle leasing company.Such a move was mooted in Fleet News in March, although executives involved declined to comment on the speculation at that time.
A statement issued by Aviva said: ‘Aviva acquired the 50% stake in LVL as part of its acquisition of RAC earlier this year and was aware of HBOS’s rights at the time the acquisition was made. This change of control triggered HBOS’s option.
‘Aviva and HBOS will now enter into discussions to agree a fair market value for LVL that may or may not lead to the sale of Aviva’s interest in the joint venture to HBOS.’
As reported on our website, www.fleetnewsnet.co.uk, last week, Aviva says the sale of its stake in the LVL joint venture will have no impact on the cost savings it stated it would achieve as a result of integrating the RAC business into fleet insurer Norwich Union, which it also owns.
In fact, it says 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.
Details of the sale come a month after it was announced that HSBC Vehicle Finance was outsourcing its contract hire fleet to Lex Vehicle Leasing in a £440 million deal.
Going live from November 1, it involves the sale of about 45,000 contract hire vehicles to Lex, which becomes Britain’s biggest leasing company with an estimated 168,000 vehicles.