Prudential is to merge its funds arm M&G Investments with its Prudential UK and Europe businesses to form a new investment division.
The division will be called M&G Prudential, which the firm described as a savings and investments business focused on meeting growing customer demand for comprehensive financial solutions. The business will control some £332 billion (€368 billion) in assets.
'Combining these businesses will allow us to better leverage our considerable scale and capabilities. This will enable us to increase our growth prospects by providing better outcomes for our millions of customers,' Prudential told the market.
M&G chief Anne Richards (pictured) added: '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.'
Prudential said M&G Prudential will be able to leverage its scale, financial strength and complementary product and distribution capabilities to enhance the development of capital-light, customer-focused solutions.
Additionally the new entity will combine M&G's active investment expertise with Prudential UK&E's capabilities in volatility-adjusted savings and liability-driven investment, providing more choice for customers of both historical channels.
Prudential also pointed out 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.
It is estimated that the merger will save £145 million (€160 million) per year, which will include job cuts. However, it was not revealed what areas of the combined company would be affected.
Additional reporting by Chris Sloley.