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.

This equates to almost a third of Old Mutual’s market capitalisation. 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.

Old Mutual will continue to work closely with the Nedbank team for the continued benefit of the customers and shareholders of both our companies.

The unbundling of Nedbank’s shares completes the process of Managed Separation that was first announced by Old Mutual plc in March 2016.

Our final step
  • On 11 March 2016, Old Mutual plc announced its strategy of Managed Separation as the Board believed that the long-term interests of Old Mutual plc shareholders and other stakeholders would be best served by separating the four businesses then owned by the Old Mutual plc group. It believed that the structure at the time trapped value and inhibited the efficient management and funding of the growth and potential of the four strong individual businesses comprising the Group.
  • The Old Mutual Group’s four businesses that are now standalone businesses are Old Mutual Limited (previously Old Mutual Emerging Markets), UK based Quilter plc (previously Old Mutual Wealth), US based BrightSphere Investment Group (previously Old Mutual Asset Management) and Nedbank.
  • Their separation and the listing of an independent Old Mutual Limited have been exciting developments for Old Mutual.



Explain to me the history of Old Mutual owning any shares in Nedbank?

  • The Old Mutual group acquired a majority interest in Nedbank, which at the time in 1986 was known as Nedcor Limited.
  • The Old Mutual group currently holds a 52% stake in the issued share capital of Nedbank in its shareholder funds.
Why is the Unbundling of Nedbank happening?
  • As part of the Managed Separation process, Old Mutual is separating its four businesses with an aim to unlock shareholder value. The businesses are Old Mutual Limited (previously called Old Mutual Emerging Markets), Nedbank, Quilter plc (previously called Old Mutual Wealth UK), and BrightSphere Investment Group (previously called OMAM in the US).
  • Three of these steps have already been completed, with the Nedbank Unbundling being the final step of the Managed Separation process.
What impact does the Managed Separation have on Old Mutual’s relationship with Nedbank?
  • Nedbank and Old Mutual have a long history as commercial partners, and this will continue, with no impact on ongoing collaboration between the two companies. Nedbank is already an independently listed company.
  • Nedbank and Old Mutual entered into a new relationship agreement governing the terms of their relationship, which comes into effect upon the completion of the Nedbank Unbundling.
  • This new Relationship Agreement will replace the previous agreement between Nedbank and Old Mutual plc.
  • The full Relationship Agreement is available to view on both the Old Mutual and Nedbank websites.
Is Old Mutual selling Nedbank? What is happening to Old Mutual’s stake in Nedbank?
  • No, we are not selling any part of our shareholding in Nedbank to a new investor. The Nedbank Unbundling will occur by way of a distribution in specie of Nedbank shares.
  • After the Nedbank Unbundling, Old Mutual will retain a minority interest of 19.9% in Nedbank in its shareholder funds.
  • We continue to work closely with the Nedbank team going forward and intend to retain our relationship.
What will shareholders receive from the Nedbank Unbundling?
Old Mutual shareholders can expect to receive about 3.2 Nedbank shares for every 100 Old Mutual shares they hold.
How will fractional entitlements be treated?

In line with the JSE’s Listings Requirements, the following will happen:

  • Fractional entitlements to Unbundled Nedbank Shares will be rounded down to the nearest whole number ; and
  • The aggregated fractions of the Unbundled Nedbank Shares to which a Shareholder is entitled will not be transferred to them.
  • Instead, they will be sold in the market as soon as practicable after the Unbundling; and
  • Shareholders will accordingly receive monetary compensation in respect of their fractional entitlements to Unbundled Nedbank Shares following this disposal.
  • The reason for this is that we cannot deliver a fraction of a Nedbank share to a shareholder. So we will deliver the nearest whole number (rounded down) in Nedbank shares with the value of the fraction delivered in cash (where applicable).
How much will Old Mutual shareholders receive for their fractional entitlements?
  • As an example: assume that an Old Mutual shareholder holds 100 Old Mutual shares at the close of business at the Record Time.
  • In terms of the Unbundling, each qualifying Old Mutual shareholder is entitled to 3.21176 Unbundled Nedbank Shares for every 100 Old Mutual shares held. We can only deliver whole numbers of shares so this entitlement is rounded down to the nearest whole number (3 in this example) to get to the number of Nedbank shares that the shareholder will receive.
  • The shareholder will then also receive a cash payment for the fractional entitlement equal to R47.55.
    • This is calculated by taking the fractional entitlement of Nedbank shares (of 0.21176 in this example after the delivery of the 3 Nedbank shares) and multiplying it by a Nedbank share price of R224.55924 (being the price set in terms of the JSE listing rules and announced on 11 October 2018).
  • You can read about the detailed calculations in the Nedbank Unbundling announcement.
How will Old Mutual shareholders receive the cash proceeds for their fractional entitlements?

The Cash Proceeds will be paid

  • by Old Mutual to the relevant registered shareholders that hold their Old Mutual shares in certificated form ; and
  • by a nominee or CSDP to the relevant shareholders that hold their Old Mutual shares in uncertificated form within a nominee account or within a CSDP.
  • Shareholders on Old Mutual’s Namibian register, Malawian register, UK register and the Zimbabwean register will be paid the local currency cash equivalents of the cash proceeds. Their cash proceeds will be converted to local currency at the following rates:
    • Namibia: 1.00000 Namibian dollars per Rand
    • Malawi: 49.71197 Malawian kwacha per Rand
    • United Kingdom: 19.33618 Rand per Pound sterling
    • Zimbabwe: 14.64960 Rand per US dollar
When is the distribution of Nedbank shares happening?
The distribution of Nedbank shares to shareholders will take place on 15 October 2018. This is in line with the anticipated Managed Separation timeline previously communicated.
Why is Old Mutual keeping a minority shareholding in Nedbank?
  • Old Mutual has been a supportive majority shareholder in Nedbank for many years, which has been beneficial to both companies.
  • There are multiple arms-length commercial relationships between the entities.
  • We will continue to work closely with the Nedbank team going forward and intend to retain our relationship.
Can you give a summary of Old Mutual's ownership structure before the Managed Separation process and how it will look after?
The before and after Old Mutual ownership structure is as set out in the diagram at the top of this page
How was the 19.9% shareholding agreed on? What does the Unbundling mean for Old Mutual’s relationship with Nedbank? What are the main terms of agreement?
  • The 19.9% shareholding was determined through negotiations with Nedbank and discussions with the South African Reserve Bank in order to provide stability to the broader financial system and the respective investor bases of Nedbank and Old Mutual during the Managed Separation, whilst also supporting our ongoing commercial arrangements.
  • Old Mutual is committed to being a significant minority shareholder in Nedbank with board nomination rights, while retaining a right to review its precise shareholding as appropriate from time to time, in accordance with the protocols outlined in the new Relationship Agreement.
  • Nedbank and Old Mutual have a long history as commercial partners, and this will continue. It is not expected that there will be any adverse impact on the ongoing collaboration between the two companies.
  • The full Relationship Agreement is available to view on both the Old Mutual and Nedbank websites.
Will Nedbank benefit from having a broader shareholder base?
  • OML’s distribution of the majority of its shareholding in Nedbank to its shareholder base will increase the free float of Nedbank shares, resulting in increased liquidity along with a more favourable position in relevant indices.
  • A broad shareholder base is also likely to result in Nedbank having access to a deeper capital market, should it need to raise capital / equity.
  • However, the Unbundling will result in Nedbank’s register increasing ten-fold. More than 90% of the new shareholders will hold less than 100 shares. Accordingly, Nedbank intends to implement an odd lot offer after implementation of the Unbundling.
Can Nedbank benefit from the enhanced inclusivity brought by its increased shareholder base?
Nedbank values the benefits that come with diversity and inclusion and is looking forward to a broad-based views and inputs that will result from the new shareholders.
Has Nedbank’s share price outperformed the market and its peers over the last ten years?
The Nedbank share has performed well over the last few years – either the 2nd or 3rd best performing large bank share. Year-to-Date, the Nedbank share is the best performing SA bank share.
Will Nedbank arrange for conversion of dividends into sterling as a UK holder of Old Mutual Limited originally?
Please refer to Nedbank’s transfer secretaries, Link Market Services, for the settlement of dividends for shareholders in the UK.
By how much will the OML share price decrease after Unbundling?
  • Following the distribution, OML will be a smaller company in terms of the underlying assets owned by the OML Group. Therefore the OML share price is expected to be impacted by the Unbundling in a similar way to any normal dividend distribution.
  • After the record date, the value of the OML share price is expected to decrease by the same amount as the value of the Nedbank distribution. The actual impact seen could be different due to the impact of equity markets, economic environment and any re-rating which could occur.
What is the benefit of Unbundling for me as an OML shareholder when my share price will fall?
There is no change in the shareholders' position triggered by this transaction. The Unbundling will change the way that OML shareholders own their existing investment. The price hese two shares will change over time but at the point of ere is no change in the total value owned by shareholders. OML will be a smaller company in terms of the assets represented by OML shares than before the Unbundling but after the U OML shareholders will own shares in Nedbank directly as well as in OML.
Has investing in Nedbank been a good investment for Old Mutual shareholders?
Nedbank has produced good returns in the period, with cash dividends being paid every year.
How have you decided that the time is right to proceed with the distribution of Nedbank shares?
The Share register has developed as we expected, and trading volumes have normalised. Accordingly, the OML Board believes that the share register has settled sufficiently for an orderly distribution. The Nedbank Board concurs.
Will OML be offering a free share dealing facility?
  • Shareholders can use the existing, low cost dealing facility.
  • For more information on OML’s current share dealing facility, please contact your share registrar below
What are the implications for Nedbank of Old Mutual’s continued expansion into personal loans and basic current accounts?
Nedbank competes with a wide range of banking and non-banking peers and believes it has attractive plans, innovations and customer value propositions in the pipeline to compete.
What scope is there for increasing the arms-length synergies between Nedbank and Old Mutual now that the Unbundling is happening?
  • The two CEO’s - Peter Moyo and Mike Brown - regularly meet to discuss ways to enhance the synergies.
  • This interaction is governed by the provisions of the Relationship Agreement between Old Mutual and Nedbank and all interactions between them are in accordance with the provisions of the Relationship Agreement.
What commercial benefits has OML received from Nedbank?
OML and Nedbank have identified a number of mutually beneficial opportunities to create value for both parties. These include areas like procurement and IT.
Where will OML and Nedbank directly compete? Does the retention of 19.9% mean OML will stop working with Bidvest and use Nedbank’s banking licence instead?
There are no plans to stop working with Bidvest. The Unbundling will not have any impact on our current commercial arrangements.
What are the tax implications for shareholders of being given Nedbank shares?
What is the impact on my base cost of OML shares from the Unbundling of Nedbank?


South Africa

Link Market Services
+27 (0)86 140 0110 (if calling from South Africa)
+27 (0)11 715 3000 (if calling from overseas)
Email: oldmutualenquiries@linkmarketservices.co.za


National Bank of Malawi
+265 (0)182 0622 | +265 (0)182 0054
email: nbminvestment@nedbankmw.com


Transfer Secretaries (PTY) Ltd
+264 (0)61 227647
Email: ts@nsx.com.na

United Kingdom

0333 207 5952 (if calling from the UK)
+44 121 415 0805 (if calling from overseas)
Website: www.shareview.co.uk


+263 (0)475 1559 | +263 (0)475 1561
Email: corpserve@escrowgroup.org