Prudential has announced plans to spin off M&G Prudential to allow its UK and European business to operate as a more cost-effective standalone entity.
In company results released on 14 March, Prudential said M&G Prudential will be led by John Foley, who is currently chief executive. M&G Prudential is expected to target growing demand for financial solutions.
As part of the changes, M&G Prudential will also sell £12 billion (€13.5 billion) of its shareholder annuity in Rothesay Life.
Prudential opted to merge life insurance business Prudential with its asset management arm M&G in August last year in an attempt to make better use of the scale and capabilities available, the company said.
Meanwhile, Prudential, under the stewardship of group chief executive Mike Wells, will focus its efforts on the Asian, US and African markets.
These are viewed as much faster-growing markets than the existing UK and European operations. Prudential PLC is currently served by its asset management arm Eastspring.
A spokesman for Prudential told Citywire Selector: ‘Eastspring has been a very successful asset manager and will continue to be so for Prudential PLC following the demerger. Eastspring will continue to serve as the Asian asset manager for Prudential, while M&G Investments will serve that function for Prudential M&G.
‘In terms of management, Prudential M&G will inevitably form its own board and management team, with existing management committee expected to go forward. That means Anne Richards, as well as John Foley and the other members of the executive management team, will remain in place.’
The timing of the demerger will be subject to a number of factors, including the completion of the UK annuity sale, prevailing market conditions, the transfer of the legal ownership of the Hong Kong business and efforts to minimise costs associated with the demerger.
An update on the demerger, related steps and timing will be provided in due course.