Return of capital to ordinary shareholders

Over the last year, we’ve focused Aviva’s businesses to our core markets in the UK, Ireland and Canada. We’ve sold eight businesses, and this generated around £7.5bn of excess capital.

In this video, we’ll briefly explain how we’re going to return £4.75bn to our ordinary shareholders.

There are two ways we’re doing that: through a share buyback programme that finished in March, and by giving £3.75bn to ordinary shareholders through a B share scheme, which we’ll explain shortly.

Let's take these one at a time.

Firstly, let's look at the share buyback.

A share buyback means that Aviva uses its own funds to buy Aviva shares. Those shares are then cancelled, which reduces the overall number of shares in Aviva.

That means each share represents a slightly larger proportion of the company.

We’ve now finished buying back £1 billion worth of Aviva shares in total.

This started in August 2021 and ended 31 March 2022.

The second way we’re returning excess capital to our shareholders is by giving £3.75bn to ordinary shareholders through a B share scheme.

The way we’ll do this, is that, subject to shareholder approval, every ordinary shareholder will receive one temporary share, known as a ‘B Share’, for each Aviva ordinary share they hold.

We'll then pay a fixed amount to redeem each B share.

You’ll find the amount you can expect to receive in a document outlining the plans known as the Circular, which was published on 5 April 2022.

As an illustrative example, if you had 100 ordinary Aviva shares at the relevant record date, you’d receive 100 more B shares, then we’d give you roughly £101 in exchange for those extra 100 B shares.

If approved by shareholders, the scheme will take place in May 2022.

Once the scheme has been approved at the General Meeting in May, as a shareholder, you don’t need to do anything.

Just make sure that your address and bank details are correct to avoid any delays in receiving your payment.

We’d also encourage you to vote at the General Meeting, when ordinary shareholders are asked to approve the plan.

The B share scheme is an efficient and quick way to return capital to ordinary shareholders.

Finally, to mitigate any fluctuation in the price of Aviva shares as we return the capital to shareholders, we’re planning something called a Share Consolidation.

As an illustrative example, going forward, you'll hold approximately 76 new ordinary shares for every 100 ordinary shares you currently hold.

The ratio for this consolidation is set out in the Circular.

This means that the total number of Aviva ordinary shares in issue will be less.

The reduction in the number of shares following the consolidation reflects how much cash will be returned to shareholders through the B Share scheme.

Again, full details can be found in the Circular.

After this Share Consolidation, as an ordinary shareholder, you’ll see your number of shares reduce, but you'll still own the same percentage of Aviva as you did before.

To find out more information and read the FAQs, go online to Aviva.com.