Johannesburg - Old Mutual, Africa’s largest insurer, agreed to buy UK-based Quilter Cheviot for as much as 585 million pounds (R10.4 billion) to accelerate its growth in wealth management and expand its client base.
Quilter Cheviot, which traces its roots to 1771, has 38,000 clients and manages 16.2 billion pounds, London-based Old Mutual said in a statement today.
The acquisition will be funded by proceeds from the sales of Old Mutual’s European units and a minority stake in its US asset-management arm.
“Quilter Cheviot fills a significant gap in our business, allowing us to serve better the affluent and high net worth segments,” Julian Roberts, chief executive officer of Old Mutual, said in the statement.
Old Mutual said it aims to build a wealth business managing 92 billion pounds.
The purchase price includes about 42 million pounds of deferred stock for Quilter Cheviot’s managers, depending on the business’s performance.
Old Mutual Asset Management completed its initial public offering in New York on October 15, raising a total of $483 million.
Sales of insurance businesses in Germany, Austria and Poland will garner about 310 million euros ($396 million) for Old Mutual as it simplifies its operations. - Bloomberg News