Prudential plc announced its intention to combine its asset manager M&G with insurance businesses Prudential UK & Europe (Prudential UK&E) to form M&G Prudential in a move that will revive speculation the businesses might spun off or sold at some stage.
The combined business will manage £332 billion of assets.
“The unified business will also be better positioned to develop and fund joint product propositions and to build new digital service and distribution to meet fast changing customer needs,” said Prudential.
“This investment and associated cost savings, will be shared between M&G, and Prudential UK&E’s with-profits and shareholder businesses, with shareholders expected to contribute circa £250 million towards the investment and to benefit from cost savings of circa £145 million per annum by 2022, excluding revenue synergies.”
John Foley, currently chief executive of Prudential UK&E, will become chief executive of M&G Prudential and remains a member of the Prudential plc board.
Anne Richards will remain chief executive of M&G and a member of the Prudential plc board.
Both Richards and Clare Bousfield, CEO Insurance for Prudential UK&E, will become deputy chief executives of M&G Prudential.
Further details about the combination will be presented at Prudential plc’s investor conference in London on November 16, 2017.
Foley said: “I look forward to working with the teams across both sides of the business to develop the products and capabilities that will help us to continue to lead the fast-changing savings and investments market.
“Prudential UK&E and M&G both offer well designed solutions which help investors meet their most important financial goals.
“Combining their complementary strengths allows us to provide greater choice to a wider range of customers.”
Richards said: “This is an exceptional opportunity to bring together M&G’s extensive investment capabilities and Prudential UK&E’s expertise in balance sheet management.
“It will enable our investment teams to offer their expertise to a wider range of customers and across a broader range of investment and savings formats, while continuing to provide our current clients with the same high level of service.”