Aviva is to transfer its entire holding in Spanish joint venture, Aseval, to Bankia, for £494 million in cash.
As a result of the settlement, Aviva and Bankia have applied to the Arbitration Court in Madrid to terminate the legal proceedings between the parties and issue an award which reflects the settlement agreed.
The proceeds of the sale will be used for Aviva’s general corporate purposes and the transaction will increase the group’s economic capital surplus by around £0.5 billion.
Aviva chairman, John McFarlane, comments: “This settlement is in line with our strategy to increase Aviva’s financial strength and we have realised significant value from our joint venture with Bankia.
“We remain focused on providing excellent service to our customers in Spain, through our other bank partners and distribution agencies.”