The break-up of major insurance firm Old Mutual is under way as the company sold up to a quarter of its stake held in its US asset management business.
Plans for a break-up and four-way split of the company were revealed earlier this year – currently, Old Mutual is spread across four continents with businesses in asset management, insurance and banking. Now it has taken the first step in that process by cutting part of its 66% stake in Old Mutual Asset Management with some to be sold back to OMAM itself and the rest made available via a public offering. OMAM consists of a series of asset management firms including Copper Rock, which focuses on small-cap companies and Campbell Global, which is primarily a natural resources and forest specialist.
According to a report in the
Financial Times, the amount that will be raised from the deal is unclear but based on current share prices could be around $314 million for the initial sale – with around 50% of the company still to be in Old Mutual’s hands.
While this is the first significant move since the break-up announcement, it should be noted that it is not the first time that Old Mutual has reduced its stake in OMAM – the company sold around 13% of its shares last year.
It is expected that the break-up of Old Mutual will be completed before the end of 2018 with the company also reportedly having received offers for Old Mutual Wealth, its UK-based financial services business, which is thought to have a
value of £3 billion to £4 billion.
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