Old Mutual sells German insurer to joint venture
UK LISTED fund manager Old Mutual has sold its German and Austrian insurance division to private equity firm Cinven and reinsurer Hannover.
The all-cash deal, which will reap Old Mutual €220m (£181.9m), is part of the group’s bid to slim down its work in Europe and move its focus to faster growing markets overseas.
Cinven and Hannover Re previously bought German insurer Heidelberger Leben from Lloyds Banking Group together last August for £257m.
Now the companies will reverse the Old Mutual units – which trade under the Skandia brands – into the company to form a new business called Heidelberger Leben Group.
Yesterday’s acquisition will add €4.9bn of Skandia’s funds under management to Heidelberger Leben, nearly doubling its pot of assets which currently stand at a sizeable €5.2bn.
Skandia Germany and Austria has around 400,000 policy holders and does not currently write any new business, having ended new policies in January 2013.
Old Mutual is dual-listed in London and South Africa and has an increasing presence in fast growing markets on the African continent.
Skandia Germany and Skandia Austria represented about 2.6 per cent of Old Mutual Group’s market consistent embedded value. This equates to 5.4p of the group’s 207.5p a share price. The sale will knock about 1.9p off this price.