Aviva is hoping to make life easier for its growing band of US investors by creating a parallel listing on the New York Stock Exchange, in the first new issue of American Depositary Receipts from a UK company in almost a decade.
Andrew Moss, chief executive of the UK’s second-biggest insurer, said it had taken a couple of years of work to ensure Aviva was compliant with the US Sarbanes-Oxley governance rules.
The company declined to put a figure on the costs involved, but said that the work had been beneficial to the group more broadly as it had enhanced risk management and controls as part of its broader “global finance programme”.
US listings using ADRs were popular among companies from the UK and elsewhere during the second half of the 1990s, with more than 30 new issues from UK companies alone, according to Dealogic.
However, the dotcom crash and the scandals at WorldCom and Enron led to the strict Sarbanes-Oxley reporting and governance rules, and the increased cost of compliance has put most companies off pursuing ADR issues since then.
There have been no new issues from UK groups since Gemini Genomics in 2000 and only five follow-on issues, four of which were from Randgold Resources, the mining group.
Aviva is raising no new capital as part of the listing, which is designed to make trading more efficient for its US investors. They hold about 20 per cent of its shares, worth about £2.6bn.
Mr Moss said the company hoped to attract new US investors. “We have no current plans to raise capital, but in the event that we ever did, a US listing would help us to do that,” he said.
The group’s US shareholder base has grown rapidly since it acquired AmerUs in 2006, Mr Moss said. Aviva has been pushing hard for growth in the US since its acquisition, and has doubled its business volumes there in two years.
“The US is a strategically important market for Aviva. It is the largest savings market in the world and represents a significant growth opportunity for us over the long term,” Mr Moss said.
“Listing now is a natural step for Aviva as more than 20 per cent of our shareholders are in the US and we expect that number to increase.”
Aviva shares rose 17.1p to 467.5p on Wednesday.