Old Mutual details its business split and plans for fresh IPO

Old Mutual chief executive, Bruce Hemphill, has provided an update on the managed separation of the group’s businesses – including the split into two new entities, and how they will be compiled.

Old Mutual announced in March 2016 that it would be separating its businesses to cut down on international operational costs, and to be better take advantage of and enhance its smaller operations.

The group said it felt that operating under its one ‘major corporation’ structure was inhibiting its separate operations from reaching their full potential.

In a statement ahead of the company’s AGM, CEO Bruce Hemphill said that, once this business separation is complete, the group will be separated into four units, that will operate under two new entities. The units are:

  • Old Mutual Wealth (UK);
  • Old Mutual Emerging Markets (South Africa);
  • Old Mutual Asset Management (US) and
  • Nedbank.

Hemphill said: “We are very pleased with the progress we have made since announcing managed separation. We have said we would create four independent businesses, and with the recently announced transactions in respect of Old Mutual Asset Management (OMAM), that business is now independent.

“We are aiming to complete the two listings that will materially deliver the managed separation at the earliest opportunity in 2018 after our full year results, subject to regulatory and other approvals.”

The group said that the managed separation would be materially complete by the end of 2018.

“To that end, we intend to pursue one or more transactions which will ultimately deliver two separate entities – listed on both the London and Johannesburg stock exchanges – into the hands of Old Mutual plc’s then shareholders.”

One entity will consist principally of the Old Mutual Wealth operations, and the primary means of achieving this outcome is likely to be through a demerger, with the possibility of a small Initial Public Offering, the group said.

There will be a new South African holding company, to be named Old Mutual Limited, which will initially consist of Old Mutual Emerging Markets, the Group’s Nedbank shareholding and Old Mutual plc.

“Old Mutual plc is considering all its options with regard to its cash, debt and contingent liabilities, taking into account the cash proceeds from disposals and requirements of the standalone balance sheets of the subsidiaries. These options include retaining debt in Old Mutual plc after the point of separation.”

Read: Vodacom to acquire R35 billion stake in Kenya’s Safaricom

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Old Mutual details its business split and plans for fresh IPO