Prudential has announced plans to split its business in two, with one focused on the UK and Europe and the other on international markets including Asia, where it hopes to sell its products to the growing numbers of wealthy consumers.
M&G Prudential will be a savings and investment provider in the UK and Europe, while Prudential plc will be an international insurance group targeting growth opportunities in Asia, the US and Africa.
Both firms will be headquartered in London and listed on the London Stock Exchange, the financial services group said. Prudential’s shareholders will hold shares in both firms once the demerger is completed.
Paul Manduca, Prudential’s chairman, said that splitting the company in two would allow the two firms to better focus on their individual strategies.
“The decision to demerge M&G Prudential follows a rigorous review by the board which considered all options, including the status quo, and concluded that it is in the best interest of the group to operate as two separately-listed companies, able to focus on their distinct strategic priorities in their chosen geographies,” Manduca said. “Both are expected to meet the criteria for inclusion in the FTSE 100 index.”
Mike Wells, Prudential’s group chief executive will lead the international business, Prudential plc. The company will target Asia, offering insurance and savings options to a growing and increasingly wealthy population.
In the US, the company’s Jackson business is already one of the largest providers of retirement solutions in America, targeting the country’s 75 million baby boomers.
“In Africa, Prudential has established operations in five countries since 2014, with a substantial opportunity to serve the rapidly expanding customer demand for long term financial solutions,” Prudential said.
M&G Prudential will continue to be led by its current chief executive, John Foley, with a focus on running a more capital efficient and reduced risk businesses. As part of that strategy it has agreed to sell a £12bn annuity portfolio to Rothesay Life.
Prudential said the timing of the demerger would depend on several factors, including the completion of the UK annuity sale, and the prevailing market conditions. It will be subject to the usual shareholder and regulatory approval.