Prudential boss ‘wouldn’t be surprised’ by offer for Asia arm
PRUDENTIAL’S chief executive Mike Wells said yesterday he would not be surprised if competitors are eyeing up the insurer’s high-growth Asia arm amid speculation rivals are weighing up a bid.
Mr Wells told investors that performance in the first half had “again been led by Asia” as double-digit growth in the region helped drive the FTSE 100 company’s profits up 9pc to a record £2.4bn.
The insurance giant is in the process of splitting its UK and European businesses from the rest of the group, causing speculation that a competitor could make a move for its prized Asian arm.
Sources told Bloomberg News yesterday that the Chinese insurer Ping An is weighing up a deal but has not made an approach to the London-listed company.
“Before that story broke I spoke about the fact I’ve been to China twice in the last week – that had nothing to do with M&A,” Mr Wells told The Daily Telegraph. “One was personal, and the other was to see regulators on the new structure. Nothing to do with M&A.”
He said that Prudential had a hard business model to replicate in Asia and so it was “not surprising to me if somebody in a boardroom is looking at the qualities of the business saying we want those”. He said the plan was to keep all the businesses it currently owns, although “if someone’s talking to us we have to listen”.
The company’s first-half results showed that the group continued to cash in on Asia’s rapidly growing middle classes during the opening months of the year, posting an 11pc boost in new business profit in Asia.
Total profits in Asia rose 7pc to £1.02bn over the first half, making it Prudential’s biggest contributor to profits after the US. Meanwhile net inflows at M&G shrank 51pc to £3.5bn, while UK profits inched up 4pc to £778m.
Shares closed up 3.7pc at £18.22.