British insurance major Prudential is set to start a split of its UK business from the group's Asian and American operations, which will create a new FTSE 100 company worth up to £7bn.
The new British entity will be named M&GPrudential, while the other half will be known as Prudential plc and will include the Asian operation based in Hong Kong, a smaller business in Africa, and US retirement business Jackson National Life, according to the FT.
Analysts expect Prudential to give a firm timetable for the split alongside half-year results on Wednesday and anticipate it could be finalised as early as autumn.
I believe we have the right capabilities and experience to grow this business at scale"
Following completion of the demerger, Prudential plc will be about five times bigger than M&GPrudential. The move to separate the UK business was first announced by Prudential CEO Mike Wells' in March last year.
Post-split, existing investors will own shares in both Prudential and M&GPrudential.
About two years ago, Prudential merged its UK insurance business with fund manager M&G Investments and created M&GPrudential.
The UK business has long been accepted the low-growth, cash generative part of the group; however, CEO John Foley wants to change that perception.
"We are in great shape to use the freedom of demerger to grow our business . . .[I] believe we have the right capabilities and experience to grow this business at scale," he said at an investor day in July, as reported by the FT.
Subscribe to International Investment's free, twice-daily, newsletter
