Aviva increases stake in India venture to 49%

Aviva said it has completed the acquisition of an additional 23% share in Aviva India from its joint venture partner Dabur Invest Corp.

The acquisition follows recent regulatory changes which allowed Aviva to increase its shareholding to 49%, the maximum allowed under India's foreign direct investment limits (FDI).

The transaction is expected to have a neutral impact on Aviva's IFRS net assets. In 2015, Aviva India contributed £36m to Aviva's IFRS net assets and £4m to Aviva's pre-tax profits.

Aviva India is a life insurance joint venture between Dabur and Aviva which was formed in 2001. As is customary in such joint venture arrangements, the original agreement between the parties includes options exercisable in the event of future changes in FDI for which Aviva pays an annual option price to Dabur.

These options allow Aviva to purchase, or Dabur to sell shares at prevailing fair market value such that Aviva would hold up to the maximum number of shares permitted under FDI.