British-South African life insurance giant Old Mutual has confirmed it will break up its company into four parts, following a week of intense speculation.
Reporting its annual results on Friday morning, the company said the break-up would be completed by 2018. The separate companies will be Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank and OM Asset Management.
Old Mutual group chief executive Bruce Hemphill described the break-up as a “bold new course to unlock value currently trapped within the Group structure”.
He went on: “We have four strong businesses that can reach their full potential by freeing them from the costs and constraints of the Group. As you can see from our results, these businesses are performing strongly, have excellent competitive positions in sizeable markets and the underlying growth potential to flourish independently.”
Group chairman Patrick O’Sullivan said: “After much careful thought, we have taken the important decision that the best interests of shareholders will be served by enabling these businesses to chart independent courses over the medium term.”
Overall, the business reported before tax profit of £1.7 billion, a 11% constant currency increase on the 2014 figure (or 4% in reported currency). It announced a second interim dividend of 6.25 pence, and full-year dividend of 8.9 pence, a 2% increase on 2014.