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In a bold stroke of strategic expansion, Aviva PLC, a titan in the world of multinational insurance, announced on Monday its ambitious move to acquire the car replacement insurance firm Optiom. The deal, valued at a hefty £100 million (or $126 million), is set to propel Aviva further into the lucrative Canadian market.

Aviva To Buy Canadian Auto Insurance Option For £100M : A Symbiotic Alliance

Headquartered in London, Aviva is not new to the Canadian scene, already acting as an underwriter for Optiom O2 Holdings Inc. This acquisition, anticipated to be finalized by March 2024 pending regulatory approvals, is seen as a masterstroke. It promises Aviva a "stable, growing stream of income," leveraging Optiom's extensive distribution networks to tap deeper into what Aviva describes as a "profitable segment" of the Canadian insurance market.

The deal's legal intricacies are being navigated by Stikeman Elliott, representing Aviva. The legal representation for Optiom remains under wraps.

Expanding Horizons: Canada's Insurance Market Beckons

Tracy Garrad, the CEO of Aviva Canada, heralded this acquisition as a significant bolster to their distribution and service offerings in a highly coveted segment of the Canadian market. Reinforcing this move, data analytics giant Statista forecasts the Canadian automobile insurance market's value to hit an impressive $15 billion in 2023.

Aviva To Buy Canadian Auto Insurance Option For £100M : A Canadian Powerhouse

Optiom stands as Canada's premier vehicle replacement insurance provider, with operational licenses across all provinces and territories, excluding Quebec. Based in Calgary, the firm boasts a robust network of approximately 330 dealers and over 900 brokers, having sold around 600,000 policies since its inception in 2008.

Aviva's Stock: A Steady Contender

Aviva's shares on the London Stock Exchange's FTSE 100 index showcased stability, trading at 424.9 pence on Monday morning, marginally up from Friday's close of 424.7 pence.

The Silence Before the Storm

Requests for comments from both Aviva and Optiom have yet to elicit responses.

Aviva To Buy Canadian Auto Insurance Option For £100M :  Aviva's Continued Acquisition Spree

This move is part of Aviva's broader acquisition strategy. Recent notable transactions include a £30 million deal covering the pension liabilities of the British Red Cross's retirement plans, and the acquisition of the U.K. protection business of AIG Life Ltd. for £460 million, both earmarked for completion in the first half of 2024.