Iowa Approves Athene Acquisition Of Aviva U.S. Life Business

(RTTNews) - Iowa's insurance regulator on Thursday approved Athene Holding Ltd.'s $1.8 billion acquisition of British insurer Aviva plc's (AV, AV.L) U.S. life and annuity business.

Aviva said in late December 2012 that it has agreed to sell its U.S. life and annuities business and related asset management operations - Aviva USA Corp. to Bermuda-based insurance holding company Athene Holding Ltd. for $1.8 billion, or 1.1 billion pounds. Aviva will, however, retain the North American asset management activities of Aviva Investors that are focused on third parties, and Aviva Plc assets outside the U.S.

Iowa Insurance Commissioner Nick Gerhart approved the acquisition of Aviva Life and Annuity Co. as well as its subsidiaries by Bermuda-based insurance holding company Athene Holding and private equity firm Apollo Global Management LLC (APO), subject to certain conditions. Athene has ties to Apollo Global Management.

The conditions include that Aviva cannot pay dividends or distributions to shareholders for five years or make changes in its plan of operations without approval by the insurance commissioner.

Additionally, Aviva must subject itself to increased scrutiny of affiliated investments as well as agreements, and its non-variable deferred annuities must meet reserve standards.

These conditions are in addition to enhanced reserving measures voluntarily offered by Athene as part of its filing and submissions for the July 17 hearing.

Specifically, Athene will voluntarily increase policy reserves by an additional $150 million and the company will submit itself to a capital management agreement for capital and surplus requirements as approved by the commissioner.

Gerhart said, "We're very pleased that we can expect to see this company continue its operations in Iowa under new ownership, while maintaining for the Division appropriate oversight of its activities going forward. This review of the proposed purchase has been a good process dealing with an important transaction."

The Iowa approval marks one of the last regulatory approvals for the deal. On Wednesday, Apollo agreed with the New York State Department of Financial Services to implement additional safeguards for policyholders.

Meanwhile, Athene Holding said in a separate statement that it was pleased that the Iowa Insurance Division granted approval for the deal. The company added that it expects the Aviva acquisition to close in the early fourth quarter of 2013.

AV closed Thursday's regular trading session at $12.71, up $0.08 or 0.63 percent on a volume of 44,757 shares.

APO closed Thursday's trading at $28.71, down $0.58 or 1.98 percent on a volume of 4.36 million shares.