Aviva 2014 Annual Report Download - page 142

Aviva plc Annual report and accounts 2014
Notes to the consolidated financial statements continued
138
4 – Subsidiaries
This note provides details of the acquisitions and disposals of subsidiaries, joint ventures and associates that the Group has made
during the year, together with details of businesses held for sale at the year end.
(a) Acquisitions
There have been no material acquisitions during the year.
On 2 December 2014 Aviva plc and Friends Life Group Limited (“Friends Life”) announced they had reached agreement on the
terms of a recommended all share acquisition of Friends Life by Aviva plc. The proposed acquisition is subject to a number of
conditions including approval from shareholders at a general meeting on 26 March 2015. If the conditions to the proposed
transaction are satisfied, it is expected to complete in the second quarter of 2015.
(b) Disposal and re-measurements of subsidiaries, joint ventures and associates
The profit on the disposal and re-measurement of subsidiaries, joint ventures and associates comprises:
2014
£m
2013
£m
Spain
–
long-term business (see (vi) below) 132 197
Italy
–
long-term business (see (iii) below) (6) (178)
Korea (see (ii) below) 2(20)
Turkey – general insurance (see (vii) below) (16) (9)
Aviva Investors (see (iv) below) 35
—
Turkey – long-term business (see (v) below) 15
—
Indonesia (see (i) below) (3)
—
Ireland
–
long-term business
—
87
Malaysia
—
39
Russia
—
1
Czech Republic, Hungary and Romania
—
1
Poland
—
(4)
Other small operations 15 1
Profit on disposal and remeasurement from continuing operations 174 115
Profit on disposal and remeasurement from discontinued operations (see (viii) below) 58 808
Total profit on disposal and remeasurement 232 923
(i) Indonesia
In the second half of 2013, management decided to restructure existing operations in Indonesia and establish a new joint venture.
The Indonesian operations were classified as held for sale at 31 December 2013 as Aviva’s holding was to change from a 60%
controlling interest, which was consolidated as a subsidiary, to a 50% joint venture accounted for using the equity method.
On 17 January 2014, Aviva and PT Astra International Tbk (“Astra”) signed an agreement to form the 50-50 joint venture
(Astra Aviva Life) which completed in May 2014. As of that date, Aviva and Astra began to share joint control and the Group’s
holding in Astra Aviva Life was reclassified as a joint venture (refer to note 19).
A net gain of £1 million was recognised during 2014. Recycling of currency translation and investment valuation reserves of £4
million on completion resulted in an overall net loss on disposal of £3 million.
(ii) Korea
In 2013, management determined that the value of our long-term business joint venture in South Korea, Woori Aviva Life
Insurance Co. Ltd, would be principally recovered through sale and it was classified as held for sale and re-measured at fair value,
based on expected sales proceeds less costs to sell of £19 million.
On 27 June 2014 the Group completed its disposal of the 47% interest for consideration of £17 million, after transaction costs.
Net assets disposed of were £19 million resulting in a loss of £2 million (2013: £20 million loss on re-measurement). Recycling of
currency translation and investment valuation reserves of £4 million on completion resulted in an overall net gain in 2014 of £2
million.
138 | Aviva plc Annual report and accounts 2014