Following the demutualisation of the Old Mutual Society in 1999, a holding company, Old Mutual plc, was established for the Group and listed on the London, Johannesburg, Malawi, Namibia and Zimbabwe stock exchanges.
Old Mutual plc expanded both its geographic footprint and its product offering through a series of South African and international acquisitions. These included the acquisition of Skandia in 2006, a global insurer based in Sweden, with operations in the
United Kingdom (UK), the Nordics, France, Italy, Germany, Poland, Switzerland, Mexico, Colombia, Hong Kong, Singapore and Dubai; AIVA Holding Group S.A (AIVA) in Uruguay in 2012; Oceanic Life Assurance Limited and Oceanic General Insurance Limited
in Nigeria in 2013; Provident Life Assurance Limited in Ghana in 2013; Faulu in Kenya in 2014 and a majority shareholding in UAP in Kenya in 2015.
Following its expansion the Old Mutual plc Group comprised the following primary businesses:
- Emerging Markets: A sub-Saharan African financial services business offering a range of solutions to retail and corporate customers through a multi-channel distribution network, with niche businesses in Latin America and China
- Old Mutual Wealth (later named Quilter plc after Managed Separation): A wealth management business focused on the upper and middle-income markets in the UK, with a presence in several other markets
- OMAM (US) (later renamed BrightSphere Investment Group after Managed Separation): A multi-boutique asset management business focused on the institutional market in the US. OMAM has subsequently rebranded to Brightsphere Investment Group.
- Nedbank: One of South Africa's five largest banks offering a range of banking and other financial services products to retail and wholesale customers.
On 11 March 2016, the Old Mutual plc Board announced that it believed that the long-term interests of Old Mutual plc shareholders and other stakeholders would best be served by a managed separation of Old Mutual plc.
It also announced that it intended to pursue one or more transactions in the context of the managed separation, which would deliver two separate entities, listed on both the LSE and JSE, into the hands of Old Mutual plc shareholders.
The one entity, Quilter plc, consists principally of Old Mutual plc’s UK wealth management operations. It is domiciled in the UK, where it has it's primary listing. The other entity, Old Mutual Limited, a newly created South African holding company,
is domiciled in South African and has its primary listing on the JSE. Following the finalisation of the managed separation, Old Mutual plc became a wholly owned subsidiary of Old Mutual Limited and has since been renamed OM Residual UK Limited.
Managed Separation final step
On 26 September 2018 Old Mutual announced the unbundling of its majority shareholding in Nedbank to its shareholders, marking a total distribution to Old Mutual shareholders worth approximately R43.2
billion and the completion of Old Mutual Group’s Managed Separation on 15 October 2018.
Old Mutual’s 52% stake in the issued share capital of Nedbank has been reduced to a 19.9% minority stake, held by Old Mutual Life Assurance Company South Africa Limited (OMLACSA).
The distribution of Nedbank shares to shareholders took place on 15 October 2018.
The Emerging Markets business is now the principal business within the Group and will retain an appropriate strategic minority stake of 19.9% in Nedbank in its shareholder funds.
Motivation for managed separation
The board of directors of Old Mutual plc determined that the Old Mutual plc Group structure prevented Old Mutual plc’s shareholders from benefitting from the full value of its underlying businesses as:
- it prevented Old Mutual plc shareholders from directly accessing the underlying businesses, thus contributing towards a conglomerate discount
- it inhibited the efficient funding of future growth plans for the individual businesses, restricting them from realising their full potential
- the evolving regulatory environment in Europe and South Africa added additional costs, complexity and constraints
- the limited tangible synergies across the four independent businesses did not justify the central operational costs of Old Mutual plc. Instead, the closure of the Old Mutual plc Head Office in London would result in significant central cost savings.