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RBS and Old Mutual on lookout for acquisitions

Despite the downbeat UK financial services market, two big players, South African insurer Old Mutual and the Royal Bank of Scotland, are on the hunt for acquisitions.

OM investor relations director James Poole says that while the company is in no hurry, it is looking at asset management as well as life insurance for a potential purchase as it looks to increase the amount its UK subsidiaries contribute to its overall business from a tenth to a third.

RBS is reportedly setting aside £1.5bn for acquisitions and chief executive Fred Goodwin says both acquisitions and a share buyback are possibilities, depending on the deals that present themselves.

The bank has made a number of acquisitions over the last few years, with its latest being the general insurer Churchill in June.

Rumours are circulating that OM is interested in bidding for AMP&#39s UK arm, with previous speculation naming Britannic as being in the company&#39s sights but Poole declines to rule any companies in or out of consideration.

He says: “There are a number of situations in the life insurance industry in the UK that are not looking terribly healthy at the moment.

“We want to make sure that anything we buy is OK. There are opportunities but we are not too sure how attractive they are. We have run the slide rule over several opportunities but we have decided against them.”

Cazalet Financial Consulting principal Ned Cazalet says “Old Mutual made it clear some time ago that it plans to develop its UK business. The question is what will it buy and when.”


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