Prudential splits Europe business from US, Asia

UK-based life insurance group Prudential is to  demerge its UK & Europe business (M&G Prudential) from the US, Asia and Africa business, creating two separately-listed companies.

On completion of the demerger, shareholders will hold interests in both Prudential and M&G Prudential. Both the companies will be listed on London Stock Exchange.

CEO Mike Wells said: “Following separation, M&G Prudential will have more control over its business strategy and capital allocation. This will enable it to play a greater role in developing the savings and retirement markets in the UK and Europe through two of the financial sector’s most trusted brands, while Prudential plc will be able to focus on the attractive returns and growth potential of its market-leading businesses in Asia and the US.”

As a standalone entity, M&G Prudential will be led by its current chief executive John Foley and will continue its transformation into a more capital-efficient and customer-focused business, targeting growing demand for comprehensive financial solutions. According to the company, M&G Prudential remains on track to deliver its previously announced cost savings target.

Foley said: “The demerger will allow M&G Prudential to play a broader leadership role in the fast-changing savings and investments market within the UK and Europe. M&G Prudential’s proven investment capabilities and balance sheet management provide an excellent platform from which to serve the demand for comprehensive financial solutions.”

Paul Manduca, chairman of Prudential, commented: “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. Both are expected to meet the criteria for inclusion in the FTSE 100 index.”

Wells added: “Our businesses share common heritage, values and purpose. Looking forward, we believe we will be better able to focus on meeting our customers’ rapidly evolving needs and to deliver long-term value to investors as two separate businesses."

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