The UK’s largest insurer, Prudential PLC (LON:PRU), saw its market valuation revised downwards by investors on Monday after the insurance giant split from its British arm, newly-listed M&G PLC (LON:MNG).
FTSE 1000-listed Prudential has been planning the demerger since March last year, with chief executive Mike Wells saying in August that the division would allow both businesses to “maximise their potential performance”.
Investors will receive a share in M&G for every Prudential share they own, with the new UK entity estimated by analysts at Citi to achieve a valuation of around £6bn, enough to potentially place it within the FTSE 100 alongside its sister company.
Following the demerger, Prudential will now turn to its remaining US and Asian businesses, where Wells said the company currently has “leadership positions” in its chosen segments, adding that the company was also now operating in eight markets in Africa.
Asia, in particular, has been a key driver of Prudential’s growth, with demand for insurance products in the market expanding due to the region’s increasingly affluent population.
M&G will instead focus on UK and European savings, investment and retirement segments.
The company’s CEO, John Foley, also said that M&G was “well-positioned to benefit from long-term economic and social trends that offer growth opportunities for many years to come”.
The news of the completed demerger sent Prudential's shares down 8.1% at 1,384p in lunchtime trading as the market adjusted its valuation of the firm following the demerger.
Shares in M&G, meanwhile, were at 226.8p, around 3% higher than their 220p float price this morning.
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