Prudential and M&G separation takes effect
The demerger of Insurance giant Prudential has taken effect this morning, with the UK and European parts of the business spun off into a separate company called M&G, which also includes the M&G fund management company that Prudential acquired in 1999.
The remaining part of the company, consisting mostly of the insurance businesses in Asia and the United States is called Prudential. However, the Prudential brand name will continue for insurance and savings products in the UK, as part of M&G.
Shares in the two companies are now trading separately on the London Stock Exchange.
Prudential, although still listed in London, will be regulated in Hong Kong. Prudential is likely to have better growth prospects than M&G, say analysts, due, among other things, to the rapid growth of insurance in China.
Paul Manduca, chairman of Prudential, said: "This has been a complex transaction and I would like to thank everyone for their hard work. The Board believes the demerger will help Prudential and M&G to become more closely aligned to the interests of their customers and shareholders. Both businesses will retain their UK domicile and be able to allocate capital even more effectively as separate entities. We wish M&G every success in its new life as an independent business."
Mike Wells, Group Chief Executive of Prudential, said: "Prudential is now an Asia-led portfolio of businesses, focused on structural growth markets. Our businesses in Asia and the US have leadership positions in their chosen segments, and we now operate in eight markets in Africa. I am confident that the best is yet to come for Prudential's customers and shareholders."
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