South African public financial institutions, National Treasury, the Reserve Bank, and the Financial Service Board (FSB), on Friday welcomed Old Mutual’s decision to separate its four units by end of 2018.
Old Mutual on Friday said it intended to implement a managed separation of the group into four separate businesses: Wealth, Asset Management, Emerging Markets and Nedbank.
Old Mutual said its strategic review had concluded that there were limited tangible synergies between the businesses and the group’s current structure inhibited the efficient funding of future growth plans for the individual businesses.
As part of this managed separation, Old Mutual said it would reduce its shareholding in Nedbank to “an appropriate strategic minority position”, although it said it did not plan to sell to a new strategic investor.
In a joint statement, National Treasury, the Reserve Bank and the FSB said the enhanced ability of these businesses to access their natural shareholder base was welcomed and would have positive benefits for the economy.
The statement said Old Mutual Emerging Markets and Nedbank were already significant businesses in their own right with strong balance sheets.
“The enhanced ability of these businesses to access their natural shareholder base is welcomed; as is the increased alignment of the key governance structures and lead supervision with the location of the respective businesses. This will have positive benefits for the South African economy and capital markets,” read the statement.
National Treasury, the Reserve Bank and the FSB said Old Mutual had been in regular contact with them over the course of the strategic review and that the consultation and dialogue had been constructive.
– African News Agency (ANA)
