£138m sale of non-core unit will merge it with PruHealth
Standard Life is selling its private medical insurance arm to a subsidiary of South African Discovery Holdings that runs PruHealth for £138m in cash saying it wants to concentrate on long-term savings and investments.
Standard Life said 562 employees will transfer as part of the transaction. The unit will merge with PruHealth.
Standard Life Healthcare is the fourth largest provider of PMI in the UK with a market share of approximately 8%, offering products to individuals, SMEs and large corporate clients.
In 2009, Standard Life Healthcare generated IFRS profit before tax of £9.4m (2008: £7.1m) and profit after tax of £7.1m (2008: £5.0m). Standard Life Healthcare had total assets of £258.5m and net assets of £97.1m as at 31 December 2009.
Not core
Chief executive of Standard Life, David Nish, commented: ”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
Discovery is listed on the Johannesburg stock exchange with a market capitalisation of ZAR 20.9bn (£1.9bn), operating in insurance, long-term savings and well-being in South Africa, the UK, the US and China.
In the UK Discovery operates via a joint-venture with Prudential, that comprises PruHealth, a specialist private medical insurance provider, and PruProtect, a provider of pure risk protection products. It will re-brand Standard Life Healthcare under the PruHealth brand.
Chief executive of Discovery, Adrian Gore, said: "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.
PruHealth growth
“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."
The transaction is subject to approval by the Financial Services Authority and the South African Reserve Bank and is expected to complete by 31 July 2010.
