Old Mutual sells Nordic Skandia businesses
From Europe Dec 16 2011 BY: Helen Burggraf
, Contributing Editor
, International Adviser
Skandia's Stockholm office
Old Mutual, the parent of Skandia International, is to sell its Nordic Skandia businesses to Skandia Liv for £2.1bn ($3.3bn), to cut its debt, with surplus capital arising from the deal to be returned to shareholders “in due course”.
The sale does not affect Skandia's other operations, Old Mutual said.
The news sent the shares soaring yesterday after the news was announced, with the result that Old Mutual was the biggest gainer on the London Stock Exchange at the end of the day, up more than 11%.
The businesses being sold are Skandia's long-term savings and banking operations in Sweden, Denmark and Norway. These will retain the right to use the Skandia name in those territories only, according to a statement released to the LSE, and posted on the company's website.
Old Mutual, which is listed in London and Johannesburg, as well as certain African countries’ exchanges, acquired Skandia AB in 2006 for £4bn.
Skandia Liv, a subsidiary of Old Mutual, will become a separate operation once the deal completes, which is expected to take place next year, Old Mutual said.
Julian Roberts, group chief executive of Old Mutual, said the sale of the Skandia operations was a “material step” in the execution of the company’s restructuring programme, which involves reducing debt.
"The transaction will also enable us to reduce complexity within the group consistent with our stated strategy, and to focus more sharply on those parts of our long-term savings business where the greatest opportunities are available,” he added.