Old Mutual offloads Italian arm as break-up accelerates

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Old Mutual is to sell its Italian wealth management business to ERGO Italia, owned by private equity firm Cinven, for £237m plus interest.

Rothschild advised Old Mutual on the deal.

Cinven has a stake in annuity specialist Partnership, which merged with Just Retirement earlier this year, and life book consolidator Guardian Financial Services

In June, Old Mutual set out more detail on its plans to carve up the business, with Old Mutual Wealth likely to be separated out through a demerger.

The group is aiming to split the business into four: Old Mutual Wealth, South African lender Nedbank, the South African Old Mutual Emerging Markets business and its US institutional asset management arm Old Mutual Asset Management.

Old Mutual also plans to close down its London head office as part of the managed separation process. The number of full-time roles has already been cut by 15 per cent, with more job losses to follow.

Old Mutual Wealth chief executive Paul Feeney says: “Old Mutual Wealth Italy is a strong, successful and profitable business that has made a positive contribution to Old Mutual Wealth in recent years.

“I am extremely proud of the Italian team and what they have achieved. I believe that the growth prospects of Old Mutual Wealth Italy will be enhanced under Cinven and ERGO Italia’s ownership.”

Cinven partner Caspar Berendsen says: “Cinven has a strong track record of successfully growing European insurance businesses. We intend to do this with ERGO Italia through acquiring scale and providing differentiated products and distribution channels. Both ERGO Italia and Old Mutual Wealth Italy will continue to benefit from the experience and insight Cinven has gained in the European insurance industry.”

Old Mutual Wealth Italy was established in 1997, employs 110 people and manages €7bn of assets for around 53,000 customers.