Old Mutual Says Reviewing All Options After Breakup Reportby and
Company says conducting strategic review and no decision yet
Old Mutual says it will provide update on review on March 11
Old Mutual Plc said it’s considering all options as part of a strategic review after Sky News reported the insurer is drafting a plan to split itself up into standalone businesses.
The company will update investors when it reports 2015 results on March 11 and said no decision has yet been made, according to an e-mailed statement late Saturday. Old Mutual, which was founded in South Africa in 1845 and moved its headquarters to London in 1999, announced that it would undertake a strategic review when Bruce Hemphill took over as chief executive officer on Nov. 1. , it said in the statement.
A breakup of the 9 billion-pound ($12.8 billion) insurer would separate South Africa’s Nedbank, its wealth unit, and its emerging markets and institutional asset management businesses, Sky News reported on Saturday, citing unidentified people close to the company. Private-equity investors Cinven and Warburg Pincus have already made a multi billion-pound joint cash offer for Old Mutual Wealth, Sky reported.
Hemphill said on the company’s website in mid-November that he would examine Old Mutual’s businesses, management and markets over next few months and was meeting “key customers, investors and stakeholders.”
“We have seen that believers in the bancassurance concept have been proved wrong, and there is a shift away from this model,” Jaap Meijer, managing director of research at Arqaam Capital Ltd., said by phone from Dubai today. “Key reasons are challenges in cross-selling of insurance products via branch networks, new regulatory changes demanding unbundling of product offerings, the increase in overall complexity, systemic risk and new capital rules that mean there are no diversification benefits from combining insurance and banking.”
Old Mutual has 319.4 billion pounds in funds under management, according to the latest figures on its website.