Prudential to spin off M&G subsidiary

Prudential_buildingPrudential, the UK insurance to investment group, is to split off its UK and European business from its operations around the rest of the world.

The demerger will leave two standalone companies: Prudential Plc, which will concentrate on business in Asia, Africa and the US, and M&G Prudential, which will focus on UK and European insurance and asset management operations.

Speculation over a possible split had been mounting for years prior to an announcement last August that the firm would merge its UK-based fund manager M&G with its UK and European insurance and savings divisions to create a £332 billion (€368 billion) subsidiary.

Mike Wells, the group’s chief executive, said: “Our strategy is aligned to the structural trends: the saving and protection needs of the fast-growing middle class in Asia, the retirement income needs of the baby boomers in the US and the increasing demand for managed savings solutions among the ageing populations of the UK and Europe.”

In addition to announcing a 10% rise in operating profits to £4.7 billion in its full year-results for 2017, the Prudential also announced it would sell a £12 billion annuity book to Rothesay Life and use the proceeds to fund the demerger process, with both the sale and the demerger expected to complete by the end of 2019.

Following the demerger both companies will remain headquartered and listed in London. It is expected that Wells will continue as boss of Prudential Plc and John Foley will continue as chief executive of M&G Prudential.

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