Old Mutual Wealth to float in “managed separation”

Old Mutual has confirmed plans for a "managed separation" of the Group into its four constituent businesses: Old Mutual Emerging Markets, Nedbank, OMW and OMAM.

Related topics:  Finance News
Rozi Jones
28th June 2016
London Stock Exchange
"One will consist principally of the Group's Wealth operations and the primary means of achieving this outcome is likely to be through a demerger."

In a statement, Old Mutual says it intends to "pursue one or more transactions... which will ultimately deliver two separate entities, listed on both the London and Johannesburg stock exchanges, into the hands of Old Mutual's shareholders". 

The statement continued: "One will consist principally of the Group's Wealth operations and the primary means of achieving this outcome is likely to be through a demerger. The other will consist principally of the Emerging Markets operations through the creation of a new South African holding company.

"In the meantime, we intend to continue the phased reduction of our 65.8% holding in OMAM in an orderly manner while supporting the development of its strategy, as evidenced by its recently-announced acquisition of a majority stake in Landmark Partners."

Old Mutual expects the separation to be completed by the end of 2018. 

The Group says that the initial plans remain subject to change as a result of factors such as stakeholder consent and/or the readiness of the underlying businesses, adding that "equally, we may receive approaches for some or all of our businesses". 

Old Mutual Chief Executive Bruce Hemphill said: "We have started executing the managed separation and I am pleased with the progress that we have made since the announcement three months ago. We are now in a position to provide further guidance on our plans. Increased market volatility following the referendum decision to leave the EU does not affect our strategy although it may impact the performance of the underlying businesses.

"The expected headwinds of weaker and more volatile foreign exchange and equity markets to which we made reference at our preliminary results have materialised. However, the average value of the rand year-to-date 2016 has decreased by 22% as compared to the first half of 2015. We continue to keep operational management focused on maximising returns.

"We are working intensively with the businesses to prepare them for separation. We remain confident that the managed separation process will lead to the creation of shareholder value, and strong businesses for our customers, staff and other stakeholders."

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