Prudential to Separate Jackson Financial Through Demerger; Mulls Equity Raise -- Update

--Prudential says demerger of U.S. business would accelerate separation process

--The FTSE 100 insurer's aim is to focus on Asian, African opportunities

--Prudential mulls equity raise of between $2.5 billion-$3 billion in Hong Kong, London, or both

 
   By Adria Calatayud and Sabela Ojea 
 

Prudential PLC said Thursday that it plans to separate its U.S. business Jackson Financial through a demerger and that it is considering an equity raise of up to $3 billion as it doubles down on Asia.

The FTSE 100 insurer said the proposed demerger of Jackson from the group would accelerate the separation process and complete its transformation to focus exclusively on its high-growth Asia and Africa businesses.

A demerger would lead to an earlier separation than would have been possible through a minority IPO, Prudential said, adding that this accelerated process would complete its transformation into a group wholly focused on the health, protection and savings markets of Asia and Africa.

"Following the demerger, as a pure-play Asia and Africa business, Prudential will target a debt-leverage ratio of around 20% to 25% over the medium term," it noted.

As part of the demerger, shares in Jackson would be distributed to Prudential shareholders, the company said. Prudential added it would retain a 19.9% noncontroling interest in Jackson, which it would seek to monetize over time to support investment in Asia.

The company also said it is considering raising new equity of between $2.5 billion and $3 billion in Hong Kong or London, or both, to increase its financial flexibility in light of the breadth of the opportunities to invest in growth.

The plan is subject to shareholder and regulatory approval, Prudential said, adding that it has appointed Steven A Kandarian as nonexecutive chair of Jackson's board.

Regarding its performance, Prudential said that the overall quarterly sales trajectory in Asia has kept improving during the second half of 2020, with its operating performance for 2020 expected to be in line with current market views.

London-listed shares in Prudential at 0859 GMT were down 122.50 pence, or 9.1%, at 1,218.50 pence.

Write to Adria Calatayud at [e-mail] and Sabela Ojea at [e-mail]

(END) Dow Jones Newswires

January 28, 2021 04:33 ET (09:33 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.