Prudential to split into two companies to target Asia

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Meanwhile, Prudential also announced the sale of a £12 billion (US$16.7 billion) of United Kingdom annuity portfolio to Rothesay Life, in line with its strategy to transition towards a more capital light business model.

According to the company's statement, its United Kingdom and Europe savings and investment business, M&G Prudential, led by its current division chief, John Foley, will be a standalone entity focusing on more "capital-efficient and customer-focused" financial services.

The sale, which covers about 400,000 policies, comes as the provider announced it would be splitting operations from its asset management arm M&G.

The aim is to turn M&G Prudential into a more capital-efficient and customer-focused business, as the business targets increasing demand for its retirement and savings offering.

Prudential's primary listing will be in Hong Kong.

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Shareholders in life insurance behemoth Prudential (PRU) will have their holding split into two separately-listed companies, both potentially qualifying for the FTSE 100 index.

Insurer Prudential (PRU) led the index, up 5.7% at £19.30 on its plans to hive off its recently formed United Kingdom and European M&G Prudential group into a separate London-listed FTSE 100 business. This is expected to be followed by a full Part VII transfer of the portfolio by the end of 2019, with the capital benefits of the transaction expected to be retained within the Prudential group to support the demerger process.

When the merger completes - subject to shareholder and regulatory approval - shareholders will have holdings in both Prudential and M&G Prudential.

Addy Loudiadis, Chief Executive of Rothesay Life, commented, "I am delighted that Prudential, one of the UK's most respected insurance companies, has chosen Rothesay Life to secure its policyholders' pensions over the long term in a landmark transaction for us and for the industry".

The transaction makes Rothesay Life the UK's largest specialist annuity insurer with more than £37bn of assets under management and some 750,000 lives insured. Prudential will remain headquartered in London under the current Chief Executive Mike Wells, whilst John Foley will continue heading up M&G Prudential. Meanwhile, Prudential will be helmed by the group's current CEO, Mike Wells, and will operate in the growing Asia, Africa and United States markets, but remain headquartered in London. "We look forward to building on this success as we predict a very active pension buy-out pipeline ahead". We believe this shows the United Kingdom market has matured, remains very competitive and can cope with this kind of change.