LONDON Dec 18 Spain's Bankia is
paying 608 million euros ($803 million) to British insurer Aviva
for its stake in a joint venture, to settle a dispute
over the breaching of an exclusive distribution agreement.
Aviva said in a statement on Tuesday it had reached a
settlement with Bankia, which will not affect its other
operations in Spain.
The agreement follows an abritration launched by Aviva last
year after the formation of Bankia from seven regional savings
banks, including heavyweight Caja Madrid and Valencian-based
Aviva had bought a 50 percent stake in insurer Aseval from
Bancaja in 2000 and assumed management control of the joint
venture, also signing an exclusive agreement to distribute life
insurance and pension products.
This exclusive distribution agreement was breached, Aviva
said, when Bancaja merged with the other entities as part of a
government-driven programme to reduce the number of Spain's
unlisted savings banks, or cajas.
Under the terms of the settlement, Aviva will transfer its
entire holding in Aseval to Bankia.
Bankia said the deal was an important step in the
development of its insurance business that also mitigates the
legal uncertainty surrounding the arbitration.
Aviva is the fifth-largest life and pensions provider in
Spain and has 1.2 million customers.