British insurance company Aviva has agreed to divest its 25.9% stake in Singapore Life (Singlife) to Japan-based Sumitomo Life Insurance in a deal worth £800m.

Under the terms of the agreement, the Japanese life insurance company will pay a consideration of £500m for Aviva’s equity stake and £300m for the two debt instruments.

Sumitomo Life currently holds 23.2% stake in Singapore Life.

Formed through the merger of Aviva Singapore and Singlife in 2022, the Singaporean firm offers financial services to customers.

Singapore Life delivers technology-driven solutions and a broad range of products and services to provide consumers with control over their financial wellbeing.

Aviva said its exit from the Singlife advances the simplification of its footprint following the international disposal programme completed in 2021.

The divestiture is also in line with the group’s ambition to focus on its capital-light business units.

Aviva group CEO Amanda Blanc said: “This is a good outcome for Aviva. The transaction further simplifies the business and we are in a very strong position to build on our trading momentum in the UK, Ireland and Canada.”

Aviva said the proceeds will be considered alongside its existing capital management framework.

Through the transaction, Sumitomo Life aims to improve the earnings foundation of its international business portfolio and the sustainability of group business.

Besides, the Japanese firm expects to enhance customer convenience and achieve greater management efficiency by sharing Singlife’s expertise in its digital enabled business model.

Subject to customary conditions and regulatory approvals, the transaction is anticipated to complete in Q4 2023.