Prudential is merging its asset manager, M&G, and Prudential UK & Europe (Prudential UK&E) to form a savings and investments business, M&G Prudential.
The combined business manages £332 billion of assets as at 30 June 2017 for over six million customers, both in the UK and internationally, having quadrupled its total external assets since 2008.
According to the firm, the new entity will combine M&G’s active investment expertise with Prudential UK&E’s capabilities in volatility-adjusted savings and liability-driven investment to provide more choice for customers across both brands. The unified business will also be better positioned to develop and fund joint product propositions and to build new digital service and distribution.
M&G Prudential will invest to accelerate its transformation into an efficient, service-led, digitally-enabled business. This investment and associated cost savings, will be shared between M&G, and Prudential UK&E’s with-profits and shareholder businesses, with shareholders expected to contribute circa £250 million towards the investment and to benefit from cost savings of circa £145 million per annum by 2022, excluding revenue synergies.
John Foley, currently chief executive of Prudential UK&E, will become chief executive of M&G Prudential and remains a member of the Prudential board. Anne Richards will remain chief executive of M&G and a member of the board. Both Ms Richards and Clare Bousfield, chief executive insurance for Prudential UK&E, will become deputy chief executives of M&G Prudential.
Mr Foley said: “I look forward to working with the teams across both sides of the business to develop the products and capabilities that will help us to continue to lead the fast-changing savings and investments market. Prudential UK&E and M&G both offer well designed solutions which help investors meet their most important financial goals. Combining their complementary strengths allows us to provide greater choice to a wider range of customers.”
Mike Wells, Prudential group chief executive, added: “In recent years, we have seen a convergence in the investments and savings markets with customers across all geographies and demographics demanding more comprehensive solutions to their financial needs. Bringing together these two high-quality businesses, while transitioning to a capital-light model, will enable M&G Prudential to increase its growth prospects by providing better outcomes for our millions of customers and in turn generate strong returns for our shareholders.”