Aviva 2007 Annual Report Download - page 166
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18 – Interests in, and loans to, joint ventures continued
(b) Disposal of shareholding in subsidiary
The profit on disposal of 50.3% of Aviva HE was £74 million, calculated as follows:
Carrying value of the assets and liabilities at the date of disposal:
£m
Assets
Investments 153
Other assets 14
Total assets 167
Liabilities
Gross insurance liabilities (136)
Deferred tax liability (14)
Total liabilities (150)
Total net assets 17
Net assets disposed of (50.3%) 9
Consideration
Fair value of 50.3% of Aviva HE 85
Less transaction costs (2)
83
Profit on disposal before reserve release 74
Release of balance on currency translation reserve (note 34) (3)
Profit on disposal (note 3b) 71
(iii) Malaysia
On 2 July 2007, the Group entered the Malaysian long-term savings market through a joint venture with the CIMB Group,
listed on Malaysia’s stock exchange as Bumiputra-Commerce Holdings Berhad. Under an agreement signed on that date
and completed the same day, the Group acquired a 49% interest in two of CIMB Group’s subsidiaries, Commerce Life
Assurance Berhad (Commerce Life) and Commerce Takaful Berhad (Commerce Takaful), for a total cash consideration
of £72 million, representing the value of our share of net assets and expected contribution from new business. In addition,
Commerce Life and Commerce Takaful will enter into exclusive bancassurance agreements with CIMB Group’s subsidiary,
CIMB Bank, for the distribution of life and takaful insurance products through the bank’s branches.
(iv) Taiwan
On 27 April 2007, the Group signed an agreement with First Financial Holding Co., Ltd (FFHC) to form a joint venture,
First-Aviva Life Assurance Co., Ltd (First-Aviva). This gives Aviva access to one of Asia’s most attractive markets and enables
us to participate in the island’s pension reform. The Group holds 49% of First-Aviva, whose total capital is £34 million.
Regulatory approval of an insurance licence was received on 31 December 2007 and operations commenced on 2 January
2008. First-Aviva will manufacture long-term savings and pension products in Taiwan, and distribute them through an
exclusive bancassurance agreement with First Commercial Bank, a subsidiary of FFHC.
Aviva plc
Annual Report and
Accounts 2007
162
Financial
statements
Notes to the consolidated financial statements continued