Old Mutual to sell Skandia Germany and Skandia Austria to Cinven and Hannover Re

Old Mutual has agreed to sell Skandia Germany and Skandia Austria for 220 million euros to Cinven and Hannover Re. Skandia Germany and Skandia Austria are respectively the German and Austrian wealth management businesses of Old Mutual.

PRESS RELEASE

27 March 2014
Old Mutual plc (‘Old Mutual’ or ‘the Group’) today announces that terms have been agreed to sell Skandia Germany and Skandia Austria, part of Old Mutual Wealth, to a Cinven and Hannover Re acquisition vehicle (shortly to be renamed Heidelberger Leben Group).* The consideration for the transaction is €220 million in cash, plus interest to completion.
As at 31 December 2013, Skandia Germany and Skandia Austria had combined funds under management of €4.9 billion and post-tax adjusted operating profit for the year ended 31 December 2013 of €27 million.
The transaction is part of Old Mutual Wealth’s commitment to simplify its operations in Europe and focus on a select number of core growth markets. The transaction is subject to regulatory approvals and other customary conditions and is expected to complete by the end of the third quarter of 2014. Proceeds will be retained by the Group for general corporate purposes.
As at 31 December 2013, the market consistent embedded value (MCEV) of the Skandia Germany and Skandia Austria businesses was approximately £262 million, representing 5.4p** of the Group’s adjusted MCEV per share. As a consequence of the sale, pro-forma adjusted Group MCEV as at 31 December 2013 would be expected to decrease by 1.9p**. As at 31 December 2013, the net asset value (NAV) of the Skandia Germany and Skandia Austria businesses was approximately £259 million, representing 5.3p** of the Group’s IFRS NAV per share. As a consequence of the sale, pro-forma adjusted Group IFRS NAV as at 31 December 2013 would be expected to decrease by 1.9p**.
* Cinven and Hannover Re have an unconditional agreement to acquire Heidelberger Leben, on completion the Cinven and Hannover Re acquisition vehicle will be renamed Heidelberger Leben Group.
** Based on the 4,897 million shares used in the 2013 Group Preliminary Results.

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