Aviva 2007 Annual Report Download - page 140
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3 – Subsidiaries continued
The assets and liabilities at the date of acquisition were:
Fair value and
accounting policy
Book value adjustments Fair value
£m £m £m
Assets
Acquired value of in-force business on insurance contracts – 20 20
Investments 284 – 284
Reinsurance assets 20 – 20
Cash and cash equivalents 12 – 12
Other assets 4–4
Total assets 320 20 340
Liabilities
Gross insurance liabilities (278) (14) (292)
Deferred tax liability (5) (1) (6)
Payables and other financial liabilities (26) – (26)
Other liabilities (3) – (3)
Total liabilities (312) (15) (327)
Total net assets 8 5 13
Net assets acquired (55%) 4 3 7
Goodwill arising on acquisition –
The assets and liabilities above have been stated at their provisional fair values and may be amended in 2008, in
accordance with paragraph 62 of IFRS 3, Business Combinations.
The results of Petunia, Banca Network and Area Life have been included in the consolidated financial statements of the
Group with effect from 26 September 2007, and have contributed £nil to the consolidated profit before tax.
(c) Bancassurance agreement via Avipop Assicurazioni
On 14 December 2007, the Group entered a long-term bancassurance partnership in protection and non-life insurance
with Banco Popolare that will further strengthen the Group’s bancassurance presence in Italy and creates a new
opportunity in the fast-growing protection sector.
The Group paid £184 million to secure the long-term bancassurance agreement with Banco Popolare and to acquire
50% plus one share of Avipop Assicurazioni SpA (Avipop Assicurazioni), a non-life subsidiary of the bank. Life protection
business will be written in a subsidiary of Avipop Assicurazioni, which will begin trading later in 2008, subject to regulatory
approval. The Group has the majority of the voting rights and management control of Avipop Assicurazioni and has
therefore fully consolidated it as a subsidiary.
The acquisition of Avipop Assicurazioni has given rise to goodwill on acquisition of £52 million, calculated as follows:
Purchase cost:
£m
Cash paid 184
Attributable costs 4
Total consideration 188
The assets and liabilities of the company at the date of acquisition were:
Fair value and
accounting policy
Book value adjustments Fair value
£m £m £m
Assets
Intangible assets – 386 386
Investments 9–9
Other assets 3–3
Total assets 12 386 398
Liabilities
Gross insurance liabilities (1) – (1)
Deferred tax liability – (125) (125)
Other liabilities (1) – (1)
Total liabilities (2) (125) (127)
Total net assets 10 261 271
Net assets acquired (50%) 136
Goodwill arising on acquisition 52
Aviva plc
Annual Report and
Accounts 2007
136
Financial
statements
Notes to the consolidated financial statements continued