Aviva, the FTSE100 insurance giant, is preparing to take a £1bn hit on the sale of its US life assurance business.
The move is part of a major overhaul of the group, which trails behind rival Prudential at less than half the market value. Aviva announced last week that three of the company's most senior directors, who run the group's European, North American and asset management businesses, are to leave.
Andrew Moss, chief executive, has agreed with the incoming chairman, John McFarlane, to speed up changes at the group, despite the likelihood that this will dampen the sale price of Aviva USA. Investment bankers are looking at the options for the division, but it appears that a sale which would fetch at best £1bn – half what Aviva paid for the business six years ago – is the most likely option. Mr Moss could announce the sale at an investor day next month, though a firm decision has yet to be taken.
When Mr McFarlane joins Aviva this summer, he will discover a company with shares that have underperformed the FTSE350 insurance index by about a quarter over the past year. A spokesman for Aviva declined to comment.
* The board of Cable & Wireless Worldwide is expected to back a takeover bid by the telecoms giant Vodafone today. Vodafone, which has to make an offer by noon or walk away, was pondering the terms of its offer, thought to be between £810m and £1.1bn, over the weekend.