Proactive Investors - The Aviva (LON:AV) bid rumours that have sent the shares surging come following over a decade of slimming down of the life insurer, including by chief executive Amanda Blanc in the past three years.
With high levels of cash generation that analysts have been tipped to lead to bumper shareholder returns, the company has been an investor favourite.
Blanc was appointed in 2020, following other streamlining between 2012 and 2019 by her predecessor but one, New Zealander Mark Wilson, when the company shrank from operations in 28 countries to 16 and combined its UK life and non-life businesses
After a short-lived spell with insider Maurice Tulloch as CEO, industry veteran Blanc replaced him during the pandemic.
She resumed the corporate activity, with a busy 2021, when half a dozen businesses were sold or exited, including Aviva France, Aviva Vietnam, Aviva Poland, Italian life insurance and general insurance businesses, and an exit from Turkey
Last month, Aviva offloaded its stake in Singapore Life (Singlife) as part of an £800 million cash sale to Japan's Sumitomo.
Investment has been made in the UK business, including picking up AIG (NYSE:AIG)'s UK protection business for £460 million last month.
Earlier this week analysts at Jefferies estimated that further overseas disposals are possible and that the life insurer could return several billion pounds to shareholders in coming years.
The investment bank's analysts said it was “increasingly likely” that Aviva will offload its operations in India and China, which could sell for more than £1 billion, funding additional special capital returns or M&A.
Analyst Russ Mould at AJ Bell noted that overseas players Allianz (ETR:ALVG), Intact and Tryg are among the rumoured interested parties.
“What might they see in Aviva? Well, the business is forecast to have strong free cash flow and excess capital and its valuation is cheap," Mould explained.
"It has slimmed down in recent years to focus on the stronger parts of the group and there is now an opportunity to increase its position in bulk annuities which looks like a more prosperous market thanks to higher gilt yields," he added.
Mould noted that “One of the obvious times to buy a company is when it has made solid progress with a turnaround programme.
"Aviva has cast off the shackles of being a conglomerate and sharpened its focus as a result of asset disposals."