Aviva, the UK's largest insurer and the owner of Norwich Union, is looking to make a sizeable acquisition either in continental Europe or the US, with a war chest of more than £1bn at its disposal.
The group, under its chief executive Richard Harvey, recently held talks with AmerUS, a US life insurance company which has been trading in North America for more than 100 years. Although the talks came to nothing, the company is continuing to explore other options on both sides of the Atlantic, but it is unlikely to make an acquisition in the UK because of its already-dominant position in the market.
After speculation, Aviva said in a brief statement to the market yesterday it was not in talks with AmerUS. It added: "In line with its strategy for growth in the international long-term savings market, Aviva continues to review value-driven inorganic growth opportunities in the major global long-term savings markets."
The City has been awash with rumours in recent weeks that Aviva has been considering a £14bn bid for Prudential, the UK's second-largest quoted insurer. Although it is believed the company considered such a move a year ago, when Prudential was struggling after launching an unexpected £1bn rights issue, there have been no recent discussions.
Aviva's last major acquisition was made 10 months ago, when it announced it was buying the UK motoring services organisation, the RAC, for £1.bn.
Shares in AmerUS leapt almost 3 per cent at the start of trading in New York yesterday, but fell later in the day. The life insurance company's shares have risen more than 9 per cent over the past week on the back of takeover speculation.
In London, Aviva's shares fell as much as 1 per cent before closing the day up 0.8 per cent at 721p, giving the company a market value of £17bn.