Prudential sells PruHealth venture as it eyes protection market

By Sarah Jones

November 10, 2014 at 03:30 AM

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(Bloomberg) — Prudential Plc sold its remaining stake in a 10-year joint venture with South Africa's Discovery Ltd., providing the U.K.'s largest insurer with the option to re-enter Britain's protection market.

The insurer agreed to sell its 25 percent stake in its PruHealth and PruProtect joint venture with Discovery for 155 million pounds ($246 million), according to a statement today. Discovery is South Africa's largest medical-insurance administrator.

This transaction "gives us the strategic and commercial flexibility to consider operating freely in the protection market in due course," Jackie Hunt, chief executive officer of Prudential U.K., Europe and Africa, said in a statement. "This would be fully in line with our stated strategy of developing the U.K. business."

Discovery will buy out its London-based partner and plans to fund the deal with a combination of internal resources and debt, the Johannesburg-based company said in a separate statement today. The South African insurer is targeting 1 billion pounds of earned premiums and 200 million pounds of new business from U.K. operations over the next five years.

Prudential shares were little changed at 1,437 pence at 11:05 a.m. in London. Discovery shares rallied 3.3 percent to 10,345 rand.

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