You are here: Home » International » News » Markets
Business Standard

Prudential drops Jackson IPO in favour of demerger, may raise $2.5-3 bn

Former MetLife CEO Steven Kandarian will become non-executive chair of Jackson from Feb 1, Prudential said

Topics
U S banking sector | initial public offering IPO | fund raising

Carolyn Cohn & Muvija M | Reuters  |  LONDON 

IPO, shares, company, firms, market
Representational image

British life insurer Prudential said on Thursday it would split off its U.S. business Jackson through a demerger and may raise $2.5-3 billion in new equity, abandoning plans for a minority initial public offering.

Britain's largest insurer, under pressure from activist investor Third Point to break in two, said last year it planned a minority IPO of Jackson.

But on Thursday it said that a demerger would allow a quicker separation than a minority IPO and future sell-downs.

Prudential split off its British life insurer M&G through a demerger in 2019.

Peers Standard Life Aberdeen and Old Mutual have also broken up complex insurance and asset management businesses in recent years.

The Jackson demerger would "significantly accelerate Prudential's transformation into a business purely focused on profitable growth in Asia and Africa", Prudential CEO Mike Wells said in a statement.

Asia has been Prudential's fastest growing unit for several years. Prudential said it could raise equity capital in London, Hong Kong or both.

Shares fell sharply after the announcement and were down 7.4% at 0910 GMT, though analysts at Jefferies said a demerger would be the quicker option and reiterated their "hold" rating.

The company said shares in Jackson would be distributed to Prudential shareholders after the demerger, which is expected in the second quarter of 2021.

Prudential said it would retain a 19.9% non-controlling interest in Jackson.

Former MetLife CEO Steven Kandarian will become non-executive chair of Jackson from Feb 1, Prudential said.

Prudential said operating results for 2020 were anticipated to be in line with market expectations, ahead of its earnings due on March 3.

 

 

(Reporting by Muvija M in Bengaluru and Carolyn Cohn in London; editing by Rachel Armstrong and Jason Neely)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, January 28 2021. 15:45 IST
RECOMMENDED FOR YOU
.