Prudential is to demerge its US business in the second quarter of the year and raise up to $3bn of fresh equity, in a move that will complete the break-up of the 173-year-old life insurer and cement its pivot to Asia.
The company, which has been under pressure from activist investor Third Point to split itself up, said on Thursday that it had decided to demerge Jackson, the US unit, directly to shareholders rather than go through an initial public offering of the business. Prudential will retain a 20 per cent stake in Jackson.
The latest separation follows the demerger of M&G, the UK operation, in 2019.
Following the US split, Prudential will be a UK-headquartered business with operations in Asia and Africa and stock market listings in London and Hong Kong.
The equity raising is designed to pay down the group’s debt. While an IPO of Jackson would have delivered capital to the group, the same would not be true in a demerger. The new equity is likely to be marketed to Asian investors after Prudential said it wanted to increase its shareholder base in the region.
Prudential shares fell 9 per cent on news of the demerger and equity raising.