Old Mutual has completed on the sale of Old Mutual Wealth Italy to Phlavia Investimenti (previously ERGO Italia), owned by Cinven, the international private equity firm.
The transaction was originally announced, as reported, on 9 August 2016 for a fee of €278m in cash, plus interest to completion.
The sale is the final part of the divestment of Old Mutual Wealth’s continental European businesses allowing it to focus on its core UK and cross border markets, the company said in a statement announcing the completion of the deal earlier today.
Paul Feeney, chief executive of Old Mutual Wealth, pictured above, said that the sale represents “an important landmark” for the business as it completes Old Mutual Wealth’s exit from Continental Europe. “Whilst we are sorry to lose our colleagues from Old Mutual Wealth Italy, we believe their growth prospects will be enhanced under the new ownership,” said Feeney.
Erik Stattin, group chief executive of Phlavia Investimenti, said that the deal is a “new milestone” on the company’s path to become a consolidator in the Italian market.
“We have already sold our non-life insurance company in order to concentrate on life insurance; the acquisition of Old Mutual Wealth Italy is another step to strengthen our position through financial, operational and commercial synergies and diversify our product portfolio and distribution network,” said Stattin.
Old Mutual Wealth Italy was originally established in 1997 and employs 110 people and manages €7 billion for more than 53,000 affluent and high net worth customers. The post-tax adjusted operating profit for the year ended 31 December 2015 was €22 million, according to Old Mutual Wealth statistics.
Old Mutual Wealth
As reported here in June last year, Old Mutual Wealth has announced plans to de-merge from its parent and list on both the London and Johannesburg stock exchanges. The likely date of the listing hasn’t yet been set.
In a statement aimed at updating the market on what it has been calling its “managed separation” of its business into four separate entities, announced earlier this year, Old Mutual plc also said at that time that it was also planning to create a “new South African holding company”.
In announcing the managed separation, Old Mutual said it was taking the action to maximise shareholder value.