UK-based life and general insurer Aviva has embarked on a conditional agreement to divest its entire 39% stake in Eurovita Assicurazioni, to New York-based private equity firm JC Flowers, in a cash transaction valued at approximately €33m.

The British insurance conglomerate said that the transaction will enable it to focus its Italian business on more profitable, capital efficient products. The proceeds from the sale would be used for general corporate purposes.

The transaction, which is subject to IVASS and the Italian insurance regulator’s approvals, would increase Aviva’s economic capital surplus by £0.1bn and will have no impact on Aviva’s IFRS net assets.

Eurovita operates as an Italian life insurer, which distributes guaranteed savings products through a network of local and regional Italian banks.

During the first half of 2013, Eurovita contributed £6m to Aviva’s IFRS profit after minorities. Eurovita had ca. £3bn IFRS total assets at 30 June 2013.

Eurovita is majority owned by Aviva and Banco Popolare. Banco Popolare also has agreed to sell its entire stake in Eurovita to JCF.

After completion of the proposed sale of its stake in Eurovita, Aviva will continue to offer life and general insurance products to over 2.5 million customers in Italy, through bancassurance partnerships with Banco Popoplare, UBI Banca and Unicredito, as well as through Credem, Fineco and UBI BPI.