Old Mutual has given an update on its ‘managed separation’ plans, with Old Mutual Wealth set to be demerged and listed on both the London and Johannesburg stock exchanges.
The parent company said it intended to pursue one or more transactions which will ultimately deliver two separate business entities.
The update sadded: “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. There are various means to achieve this outcome and we will update the market on the precise steps we intend to follow in due course.”
Old Mutual also stated that the managed separation would be materially complete by the end of 2018 and noted the possibility of receiving approaches for some or all of the separating businesses.
“We will evaluate these carefully and rigorously, balancing the criteria of value, cost, time and risk relative to our broad stakeholder interests,” the stock exchange statement added.
Brian Spence, founding partner of consultancy Harrison Spence, said the move allowed for significant capital raising for the UK-based firm, in sterling.
He added: “The platform service in the UK is likely to be in need of significant financial support on an ongoing basis. It will allow a more formal structure for decision-making being London-based without the need for a rubber stamp from South Africa.”
