--Investment firm Cevian Capital now owns 4.95% of Aviva's total issued share capital

--Shareholders should receive around GBP5 billion of excess capital from Aviva, Cevian Capital said

--Aviva could achieve savings of at least GBP500 million in costs, the activist investor said

 
   By Ian Walker, Sabela Ojea

Activist investor Cevian Capital Partners Ltd. on Tuesday said that it now owns 4.95% of Aviva PLC's issued share capital, and that the London-listed insurance company should be able to return around five billion pounds ($7.09 billion) of excess capital to shareholders next year.

Cevian Capital, which describes itself as a "long-term, hands-on owner of European listed companies," said it sees the potential for Aviva to save at least GBP500 million in costs by 2023.

Cevian Capital also said that it expects to see Aviva to be able to complete its seven divestments, which the company says will generate over GBP5 billion of cash proceeds and will allow it to focus on its business in the U.K., Ireland and Canada.

"Aviva has made significant strategic progress over the past eleven months and we remain sharply focused on further improving our performance. We regularly engage with investors and welcome any thoughts which move us towards our goal of delivering long term shareholder value," an Aviva spokesperson said.

The FTSE 100 group announced in May the completion of the disposals of Aviva Vita and its shareholding in AvivaSA in Turkey, and said it had signed an agreement to sell its business in France after finishing the consultation process.

"Aviva now has the potential to become a focused and well-capitalized market leader that produces profitable growth, generates significant cash, and is highly appreciated in the equity markets," said Christer Gardell, managing partner and co-founder of Cevian Capital.

Aviva shares at 0950 GMT were up 14.50 pence, or 3.5%, at 425.20 pence.

Write to Ian Walker at ian.walker@wsj.com, Sabela Ojea at sabela.ojea@wsj.com

(END) Dow Jones Newswires

June 08, 2021 07:26 ET (11:26 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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