M&G and Prudential UK & Europe are to combine to form M&G Prudential, the businesses have announced.
Anne Richards, chief executive of M&G Investments, said that the new venture would mean “M&G’s fund managers will be able to offer their expertise to a wider range of clients and in a broader set of financial formats, whether direct investors, wholesale intermediaries or institutional clients such as pension funds.”
“We will also be able to invest more efficiently in the growth of our business, including the improvement of client service through new digital channels. Above all, we will have the scale to service your changing needs.”
Commenting on the change, Mike Wells, group chief executive of Prudential Plc, and John Foley, CEO of M&G Prudential, have further explained why the change has taken place, and how it creates a combined business managing some £332bn (€368bn) of assets for more than six million customers in the UK and internationally.
Commenting on the deal, Peter Gray, partner and co-head of financial services at Cavendish Corporate Finance, said: “The merger will create an investment management monolith with total AUM of £332 billion and combines M&G’s asset management expertise with Prudential’s experience in balance sheet management to create a powerhouse savings and investments business, which will satisfy the increasing demand from customers for comprehensive financial solutions.”
“The deal reflects the continued trend of consolidation in the industry as firms seek to lower costs in the face of margin pressure precipitated by the increasing popularity of tracker funds.”
Commenting further on the development, Prudential Plc noted in a statement that the new venture would lead to cost savings annually of £145m by 2022, although shareholders are expected to “contribute circa £250 million towards the investment”.
Under the new corporate structure, the following senior executive roles have been confirmed:
- John Foley, currently chief executive of Prudential UK&E, will become chief executive of M&G Prudential and remains a member of the Prudential plc Board
- Anne Richards will remain chief executive of M&G and a member of the Prudential plc Board.
- Both Anne Richards and Clare Bousfield, CEO Insurance for Prudential UK&E, will become deputy chief executives of M&G Prudential.
“Further details about M&G Prudential will be presented at Prudential plc’s Investor Conference in London on 16 November 2017,” the company added.