Old Mutual planning £9bn carve-up of its business Monday 07 Mar 2016

Old Mutual planning £9bn carve-up of its business 

Old Mutual, the FTSE 100 wealth management business, is planning to split itself up in a £9bn deal.  The Anglo-South African group is organising the break-up into standalone companies, according to Sky News.

This could lead to a takeover battle for some of its biggest operations, and would result in the carving-up of ownership of operations which manage a total of about £320bn of assets. It has a market value of £8.8bn as of Friday’s close.

The companies that will be created by this break-up are an asset management business, which includes what remains of its US division, and a wealth unit, which would house its UK operations.

Other standalone companies that will be created include one that comprises its stake in Nedbank, a South African lender, and an emerging markets business, based in South Africa. It derives two-thirds of its revenues from South Africa.

Cinven and Warberg Pincus, two buyout firms who have previously worked together,  have reportedly already put forward a joint offer of several billion pounds to take over Old Mutual Wealth, which includes Quilter Cheviot and Old Mutual Global Investors.

The company’s break-up plan could be announced to the City in time for its annual results, which are next Friday, although insiders said the deal could take months to complete.

Old Mutual almost sold Nedbank in 2010 to HSBC, but it was called off. In 2014 it listed its asset management arm, OM Asset Management, which is based in the US.

The company was started in South Africa in 1845, and has become one of the biggest London-listed wealth management groups. It has recently suffered from a weak rand.

The chief executive of Old Mutual, Bruce Hemphill, who started in his role in November, is thought to have asked for plans for the break-up when he arrived. Ingrid Johnson also joined as chief financial officer in 2014.

http://www.telegraph.co.uk/business/2016/03/05/old-mutual-planning-9bn-carve-up-of-its-business/