Old Mutual has agreed to sell Old Mutual Wealth Italy to ERGO Italia, owned by Cinven, the European private equity firm.
The consideration for the transaction is €278m in cash, plus interest to completion.
The transaction is subject to usual regulatory approvals and customary conditions and is expected to complete within six months.
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.
As reported previously, Old Mutual is working on a wider plan to break up its business, cut costs and revamp earnings.
On March 11, 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 Britain.
Old Mutual Wealth Italy was established in 1997 and accounted for less than 5% of Old Mutual’s overall wealth management activities.
The business employs 110 people and manages €7bn 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 €22m.
“We are pleased to announce the acquisition of Old Mutual Wealth Italy. This transaction is the result of a clear vision, whose goal is to create a leading player through consolidation in the Italian life insurance market. We look forward to building on Old Mutual Wealth Italy’s capabilities to enhance our distribution network and our product line, gaining access to a high-growth market,” said Erik Stattin, CEO of ERGO Italia.
“Cinven has a strong track record of successfully growing European insurance businesses. We intend to do this with ERGO Italia through acquiring scale and providing differentiated products and distribution channels,” said Caspar Berendsen, a partner at Cinven.