Prudential merger heightens speculation that a break-up of the group is in pipeline
PRUDENTIAL is to merge its UK asset management arm M&G with its European insurance unit in a shock move that will reignite speculation the businesses are being packaged up to be spun off or sold.
The enlarged group, M&G Prudential, will bring together more than 9,000 staff and £332bn in assets with the goal of saving £145m a year from the tie-up until 2022.
Mike Wells, the chief executive, refused to comment on whether the deal meant the FTSE 100 group was working towards a sale of the divisions, saying simply that the group’s structure gets reviewed many times a year. He added that it was too early to draw any conclusions on job cuts.
Rumours of a break-up have swirled around the company for years. Several investors called on the group to split itself up and revamp its underperforming UK business back in 2007.
The change was announced as Pru reported its operating profit for the six months to June 30 had inched up 5pc to £2.3bn, driven by growth in Asia.
Mr Wells said it was well placed to grow in Asia as it targeted “the opportunities created by the region’s dynamic economies, fast-growing middle class and under-penetrated markets”.
The group will pay an interim dividend of 14.5p per share, up 12pc on a year ago.
Pru’s shares slipped 15.5p to £18.26.