The deal sees the total value of the protection businesses put at around £620m, and represents Discovery's aim to establish a second home market in the UK.
PruHealth and PruProtect will be rebranded and consolidated under a single insurance brand, Vitality.
The business will offer two insurance lines, VitalityHealth in the private medical insurance market, and VitalityLife in the long-term protection market.
In a statement to the London Stock Exchange this morning, Prudential said:
"PAC's minority stake in the joint venture has the characteristics of a financial rather than strategic investment in the UK protection market, with the majority of operating functions provided by Discovery. This transaction will enable Prudential UK to realise its investment at attractive terms while providing full strategic optionality to re-enter this market in due course. Prudential UK will work closely with Discovery to ensure a smooth transition and will continue to support the business for a transitional period."
Commenting on the sale, Jackie Hunt, Chief Executive of Prudential UK, Europe and Africa, said:
"Prudential is proud to have built a successful UK health and protection business in partnership with Discovery over the past ten years. This success has enabled us to divest our stake in PruHealth and PruProtect on attractive terms for Prudential's shareholders.
"The transaction will also give us the strategic and commercial flexibility to consider operating freely in the UK protection market in due course. This would be fully in line with our stated strategy of developing the UK business and leveraging the Group's global expertise in risk-focused products."
Adrian Gore, CEO of Discovery, said:
"Taking full ownership of our UK operations signals the significance of the UK to Discovery and is key to our strategy to replicate Discovery's shared-value insurance model in this market. Discovery's increased investment in the UK has always been part of our longer-term strategy."
