Aviva snaps up Succession Wealth for £385m and rolls out bumper dividend for shareholders
Insurance and pensions giant Aviva announced it has snapped up wealth management firm Succession Wealth for £385m today, as it rolled out a bumper dividend for shareholders despite a slide in profits last year.
Aviva said the new acquisition will strengthen its position in the wealth space and expand its ability to offer high quality advice to customers, as well as allowing it to retaining a chunk of the £6bn assets it holds on behalf of savers which typically leave to be invested with competitors.
The acquisition announcement came as Aviva unveiled a raised dividend, with shareholders set to receive £4.75bn on top of an existing £1bn share buyback scheme, which tops the group’s commitment to return more than £4bn to shareholders.
The firm’s 22,000 employees are also set to see a payday with £1000 in Aviva shares dished out to each employee as a “thank you”, bosses said today.
The payouts came despite a slide in adjusted operating profits across the group of 28 per cent to £2.27bn, which the firm said reflected its offloading of eight non-core businesses last year.
The firm’s ongoing operations also saw a dip in profit however, falling 10 per cent to £1.6bn which bosses said was due to the drag of its UK & Ireland Life division.
Chief executive Amanda Blanc said 2021 has been a year of “significant strategic process” for the firm despite the drag on profits.
“We successfully completed the sale of eight non-core businesses, generating excellent value for our shareholders,” she said.
“Our financial position is strengthened and Aviva is now a much simpler, leaner business, focused on our core markets in the UK, Ireland and Canada.”
Blanc said the outlook was good for the firm as it looked ahead to 2022, estimating the shareholders will enjoy a dividend of approximately £870m, equivalent to around 31.5p, an increase of c.40 per cent on 2021.
Aviva has come under pressure from activist investor Cevian Capital to up its dividend payouts to shareholder. The investor has been pushing for £5bn pounds in a cash return by the end of 2022.