National Australia Bank NAB will buy Aviva's life and pensions business as well as its wealth management platform in Australia -- collectively named Aviva Australia -- for A$925 million $737 million.
The total acquisition cost is split into an A$825 million cash component a A$40 million dividend that Aviva Australia will pay before the deal closes and an estimated A$60 million which is a net asset adjustment to be paid post completion. Aviva said the price it has realised represents 16 times net earnings in 2008.
The cash consideration of A$825 million represents a price-to-embedded value of 1.1 times, based on Aviva's embedded value of A$734 million as of December 31,...
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