Prudential pledges to sell $5bn Jackson Life operation

Written by Adam Cadle

11/08/2020

Prudential has pledged to sell all of its $5bn Jackson Life operation and has signalled that it will keep its global headquarters in London.

The insurer said the sale will begin in the first half of next year. A partial sale will be followed by further sell-downs "over time", it added.

Mike Wells, chief executive, said: "The board has decided to pursue the full separation and divestment of Jackson to enable the group to focus exclusively on its high-growth Asia and Africa businesses. This would result in two separately listed companies with distinct investment propositions, which we believe would lead to improved strategic outcomes for both businesses. The group would have primary listings in both London and Hong Kong and secondary listings in Singapore and the US. Jackson is expected to be solely listed in the US.

“The separation and divestment of Jackson would transform Prudential into a group purely targeting the structural opportunities of Asia and Africa. Our differentiated product and geographic portfolio is well positioned to meet the health, protection and savings needs in these regions, where insurance penetration is low and demand for savings solutions is rapidly developing. The post-separation group would focus on growth, with a view to achieving sustained double-digit growth in embedded value per share. This would be supported by growth rates of new business profit, which are expected to substantially exceed GDP growth in the markets in which the group operates.

“The group expects to commence separation by way of a minority IPO, targeting the first half of 2021, followed by future sell-downs over time, subject to market conditions, with the proceeds used to increase financial flexibility for further investment in our Asia and Africa business. If market conditions are not supportive of an IPO, the group’s current intention is that separation would be facilitated through a demerger of the group’s stake in Jackson to our existing shareholders. Any required shareholder approval for the separation will be sought in advance of its execution.

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