Prudential is to combine its asset manager, M&G, and Prudential UK & Europe (Prudential UK&E) to form M&G Prudential, a savings and investments business which will target growing customer demand for comprehensive financial solutions.
The combined business manages GBP332 billion of assets for over six million customers, both in the UK and internationally, having quadrupled its total external assets since 2008.
M&G Prudential will leverage its scale, financial strength and complementary product and distribution capabilities to enhance the development of capital-light, customer-focused solutions. 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 through retail, institutional and direct channels. The unified business will also be better positioned to develop and fund joint product propositions and to build new digital service and distribution to meet fast changing customer needs.
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 GBP250 million towards the investment and to benefit from cost savings of circa GBP145 million per annum by 2022, excluding revenue synergies.
John Foley (pictured), currently Chief Executive of Prudential UK&E, will become Chief Executive of M&G Prudential and remains a member of the Prudential plc Board. Anne Richards will remain Chief Executive of M&G and a member of the Prudential plc Board. Both Anne Richards and Clare Bousfield, CEO Insurance for Prudential UK&E, will become Deputy Chief Executives of M&G Prudential.
Further details about M&G Prudential will be presented at Prudential plc’s Investor Conference in London on 16 November 2017.
Foley says: “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.”
Anne Richards, Chief Executive of M&G, says: “This is an exceptional opportunity to bring together M&G’s extensive investment capabilities and Prudential UK&E’s expertise in balance sheet management. It will enable our investment teams to offer their expertise to a wider range of customers and across a broader range of investment and savings formats, while continuing to provide our current clients with the same high level of service.”
Mike Wells, Prudential plc Group Chief Executive, says: “M&G and Prudential UK&E have a long history of collaboration and we are fortunate to have two highly respected brands. Combining these businesses will allow us to better leverage our considerable scale and capabilities.”
“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.”