Guggenheim Life, the insurance arm of investment firm Guggenheim Partners LLC, is in pole position to buy some, or all, of Aviva USA, valuing the U.S. unit of Britain's No. 2 insurer at 800 million pounds ($1.25 billion), according to the Sunday Telegraph.
Aviva Plc (AV.L) said last week it had written down the value of its U.S. business by 876 million pounds, fueling speculation the unit is to be sold as part of a broader overhaul aimed at boosting the group's financial performance.
Guggenheim Life is understood to be in discussions with Goldman Sachs Group Inc (GS.N), which is advising on the sale of Aviva USA, eyeing the U.S. fixed-annuity business to complement its existing operations, the Sunday Telegraph reported.
The discussions value Aviva USA at about 200 million pounds less than earlier estimates, yet the British insurance firm would be willing to take a hit on the valuation as selling it would release about 2 billion pounds of capital, the Sunday Telegraph added.
Representatives of Aviva did not immediately respond to a request for comment while Guggenheim Partners declined to comment.
Aviva has not identified publicly which businesses it wants to shed, but said on August 9 after posting lower-than-expected half-year profits that it had appointed investment banks to advise on the sale or closure of 10 of its 16 units.
Guggenheim Partners, a privately held financial services firm with more than $160 billion in assets under management, made its last life insurance acquisition in December, buying EquiTrust Life from West Des Moines, Iowa-based FBL Financial Group Inc (FFG.N) for $465.3 million in cash.
(Reporting by Greg Roumeliotis in New York, Editing by Gary Crosse)