Standard Life has sold off its healthcare arm to South-African insurer Discovery for £138m and is set to rebrand as PruHealth.
Discovery linked up with Prudential in a joint venture that comprises private medical insurance provider PruHealth and protection provider PruProtect in 2007.
Standard Life says the manufacturing of private medical insurance is not core to its UK strategy, which is focused on the long-term savings and investments market.
The insurer says the cash proceeds from the sale will be used for general corporate purposes including the acceleration of plans to grow the business. Approximately 562 employees will transfer as part of the transaction.
The transaction is expected to complete by July 31, subject to approval by the FSA and the South African Reserve Bank.
Chief executive David Nish says: ”Standard Life Healthcare is a leading and successful business in the UK PMI market, but in the context of sharpening our strategic focus on the long-term savings and investments market we concluded it is not core.
“Discovery is a highly respected global health insurer with an established presence in the UK.
“The sale provides an excellent outcome for Standard Life Healthcare’s customers, commercial partners and employees as well as for Standard Life’s shareholders.”
Discovery operates in insurance and long-term savings in South Africa, the UK, the United States and China. It is listed on the Johannesburg stock exchange with a market capitalisation of £1.9bn.
Discovery chief executive Adrian Gore says: “We are excited by the opportunity to acquire a business of Standard Life Healthcare’s quality. Standard Life Healthcare’s focus on delivering the highest quality of products and service is consistent with our own approach.
“The assets of Standard Life Healthcare and PruHealth are highly complementary and we believe that the combined business will be well-positioned for future growth as a leader in the PMI market.”