Prudential plc (PUK) announces its intention to demerge its UK & Europe business M&G Prudential from Prudential plc, resulting in two separately-listed companies with different investment characteristics and opportunities.
On completion of the demerger, shareholders will hold interests in both Prudential plc and M&G Prudential. As a standalone entity, M&G Prudential will be led by its current CEO John Foley and will continue its transformation into a more capital-efficient and customer-focused business, targeting growing demand for comprehensive financial solutions. M&G Prudential remains on track to deliver its previously announced cost savings target. In line with this strategy to transition towards a more capital efficient, de-risked business model, M&G Prudential also announces the sale of GBP 12.0 billion of its shareholder annuity portfolio to Rothesay Life. Under the terms of the agreement, M&G Prudential has reinsured GBP 12.0 billion of liabilities to Rothesay Life, which is expected to be followed by a Part VII transfer of the portfolio by the end of 2019. The capital benefit of this transaction will be retained within the Group to support the demerger process. Prudential plc will combine the exciting growth potential of its Asia, US and Africa businesses and will be led by its current Group CEO Mike Wells. Prudential plc’s dividend policy will remain unchanged through the separation period. Following the demerger, Prudential plc will remain headquartered in the UK and retain its premium listing on the London Stock Exchange, its primary listing in Hong Kong, and other listings in Singapore and New York. M&G Prudential will be headquartered in the UK and hold a premium listing on the London Stock Exchange. In preparation for the UK demerger process, and to align the ownership of the Group’s businesses with their operating structures, Prudential plc intends to transfer the legal ownership of its Hong Kong insurance subsidiaries from The Prudential Assurance Company Limited to Prudential Corporation Asia Limited, which is expected to complete by the end of 2019.The Group will look to realise efficiencies to benefit the two businesses post demerger.