Old Mutual Says Brexit May Impact Underlying Businesses

By Tapan Panchal

LONDON--Old Mutual PLC (OML.LN) on Tuesday detailed plans for its previously announced decision to separate its business units and said that Britain's decision to leave the European Union may impact the performance of its underlying businesses by increasing market volatility.

The South African financial services group said year-to-date trading has been broadly in line with its expectations with strong gross sales. The company, however, said there had been continued weakness in the South African rand, the currency in which it generates most of its earnings, and larger-than-expected claims costs in its property and casualty and corporate businesses.

Under the separation plan, Old Mutual will split its businesses into two entities listed on the London and Johannesburg stock exchanges. One will consist principally of the company's wealth operations and the other its emerging markets operations.

The company also plans to continue with the phased reduction of its 65.8% holding in OM Asset Management and will distribute a major part of its stake in Nedbank to its shareholders, following the creation of the new South African holding company.

"We are working intensively with the businesses to prepare them for separation. We remain confident that the managed separation process will lead to the creation of shareholder value and strong businesses for our customers, staff and other stakeholders," said Chief Executive Bruce Hemphill.

-Write to Tapan Panchal at [e-mail]

(END) Dow Jones Newswires

June 28, 2016 02:58 ET (06:58 GMT)

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