Johannesburg - Old Mutual says it will sell its Italian wealth unit for around R4.2 billion to an Italian company.
In a statement issued to shareholders on Monday, the company - which is splitting into four - said it would earn 278 million euros for selling the unit to Ergo Italia, owned by Cinven. Cinven is a European private equity firm founded in 1977.
The company says, as at the end of the 2015 year, Old Mutual Wealth Italy had 7 billion euros of funds under management and contributed 22 million euros in post-tax earnings for the year.
“The sale is the final part of the divestment of Old Mutual Wealth’s continental European businesses, allowing it to focus on its core UK and cross border markets,” it says.
Read also: Old Mutual to split four main units
CEO Bruce Hemphill started a strategic review of the 171-year old company immediately after his appointment in November as its main South African operations come under pressure amid slowing economic growth and a depreciating local currency that hurts returns when converted into sterling.
Old Mutual adds proceeds will be retained by Old Mutual for general corporate uses.
IOL