South Africa: Old Mutual to separate its four businesses by end-2018
Source: Middle East Insurance Review | Apr 2016
Old Mutual said it plans to separate its four main businesses – Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank and OM Asset Management from each other by the end of 2018. Under this “managed separation” strategy, Old Mutual will ultimately cease to exist in its current form.
The four units have combined pre-tax operating profits of GBP1.8 billion (US$2.6 billion). The Anglo-South African financial services company has appointed Mr Rob Leith as Director of Managed Separation, responsible for the “coordinated execution of the managed separation”.
The breakup of Old Mutual, which is listed in London and Johannesburg, follows a strategic review announced last November, when former Standard Bank executive Bruce Hemphill took over as Group Chief Executive.
Mr Hemphill said: “Our new strategy will allow each business to have simpler access to capital markets to fund its growth more easily and be valued more appropriately, with more straight forward regulatory arrangements. We are announcing a strategy that will allow us to release the potential within the Group for the benefit of all its stakeholders for many years to come.
“There is likely to be a range of external influences on future Group reported earnings, including slower economic growth, exchange rates and equity market volatility and how we execute the managed separation. We nevertheless believe that our four strong businesses are well placed to continue to perform strongly in their domestic markets.”
GPP1 = US$1.43