Anglo-South African financial services firm Old Mutual Plc will on Tuesday list its African Financial services unit, which includes South African lender Nedbank, on the Johannesburg Stock Exchange (JSE). By this listing, the company will be returning to its roots as a South African-based financial services group and it will largely wrap up its break up plan to split the company into four separate entities.
“When I joined Old Mutual plc as chairman in January 2010, I promised that I would leave the businesses stronger and with attractive prospects in their respective markets. All four companies now meet these objectives as separate, independent firms,” the Chief Executive Bruce Hemphill told Reuters.
According to Reuters, the 173-year old company has been breaking itself up to disentangle its costly conglomerate structure stemming from a hodge-podge of disjointed acquisitions since 1999 when it moved its headquarters and primary listing to London. The split up was started by Bruce in 2016 when he said that the company’s four main businesses including a U.S. asset manager, a British wealth manager, an African financial services unit and a South African bank would achieve higher investor ratings as independent, separate entities.
The financial service firm which traces its roots to a mid-19th century South Africa as the country’s first mutual aid society by 166 members, has already sold stakes in its U.S. asset management business and listed its U.K wealth arm, renamed Quilter.
Benefits of the listing and split to shareholders
This listing will see shareholders receive one share in Quilter and three in Old Mutual Limited for every three Old Mutual Plc shares they held.
According to South African news platform 702, the shareholders will see a reduction of almost £1 billion in the Old Mutual Plc holding company debt and annual cost savings of £95 million.
The new structure will also enable shareholders to access its emerging markets business directly, without having to invest in the entire Old Mutual Plc package.
702 further stated that each business entity will have the opportunity to enhance their performance relative to their peers and allow the market to value them appropriately.