Old Mutual confirm talks with Cinven to sell Italian business
Old Mutual has entered into a short period of exclusive negotiations with Cinven over the sale of Old Mutual Wealth Italy.
Although talks are ongoing, “there can be no certainty that these negotiations will lead to any transaction,” Old Mutual said in a statement sent to the London Stock Exchange.
On 1 August, Reuters reported European private equity fund Cinven was about to start exclusive talks to buy the Italian wealth arm of Old Mutual for about $335m.
The financial services firm plans to wrap up the sale of its Milan-based subsidiary by the end of August, a source said.
Cinven emerged as the final buyer for the company which was put up for sale earlier this year.
It trumped rival bids from US investment firms JC Flowers and Apollo as well as Lombard International Assurance, a Luxembourg-based insurer held by US buyout fund Blackstone.
The deal is expected to pave the way for a series of divestments as the Anglo-South African group is working on a wider plan to break up its business, cut costs and revamp earnings.
Four business split
On March 11, as reported, Old Mutual said it would split into four businesses: a South African bank, an emerging markets unit, a US asset manager and a wealth manager in the UK.
The company said the break-up would be completed by 2018. The separate companies will be badged Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank and OM Asset Management.
Old Mutual group chief executive Bruce Hemphill described the break-up at the time as a “bold new course to unlock value currently trapped within the group structure”.
Italy, which accounts for less than 5% of Old Mutual’s overall wealth management activities, is the first chunk of that division to be spun out.