Aviva’s £7 billion bid bungler

 richard harvey.jpg

Whatever happens to Richard Harvey during the rest of his illustrious business career, he will always wear the tag of the man who bungled the £7 billion takeover bid for Prudential Insurance.

Harvey, group chief executive of Aviva, the world’s sixth largest insurance group, posted the bid for the Pru but somehow it got leaked, then Harvey let it be known that he wouldn’t sweeten the terms but this was corrected a short while later via a statement to the London Stock Exchange.

Then the Aviva board formally withdrew the offer.

Such a foul-up is most unusual for Mr Harvey who, at 55, is one of the most successful leaders in the global insurance business.

Born in Gloucester and educated at the University of Manchester where he achieved a degree in mathematics, he has come a long way in the past 14 years. In 1992 he was running the far-flung New Zealand outpost of Norwich Union, a medium sized mutally owned British insurance.

Three years later he was spotted by the board as a star for tomorrow and  appointed to the Norwich Union board, becoming group chief executive in 1998.  Mirroring the dramatic transformation of Norwich Union through a series of mergers, including Commercial Union, the ‘don’t make a drama out of a crisis’ company and more recently the motoring group  RAC, he found himself in the top job at Aviva.

In the lead up to the bid for the Pru, he surprised the City by announcing Aviva’s best-ever performance in general insurance – an operating surplus of £2.9bn, well ahead of the £2.65bn consensus forecast of analysts and 29 per cent higher than 2004.

Industry observers expect Harvey to dust himself down and then look at the Pru again at some time in the future.

Thanks for reading Big Business

David Davis


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