South African headquartered financial services company Old Mutual is believed to be at an early stage of talks to acquire Scandinavia's largest insurance company, Skandia.
Old Mutual is believed to be looking to acquire 100% of the Sweden-based insurer, which has been weakened by scandals over management bonuses and perks, at a cost of around GBP3 billion to GBP3.5 billion. If successful, the deal would create a cross sector company worth GBP8 billion.
Acquiring Skandia would give Old Mutual access into the UK and Swedish life assurance markets and ownership of a Swedish bank, while also backing up its fund management operations in the UK.
According to Reuters, quoting Swedish financial daily Dagens Industri, Old Mutual intends to bid 50 Swedish crowns a share for Skandia, and has been afforded access to the Nordic insurer’s accounts in order to perform due diligence enquiries.
Old Mutual’s interest in the continental European insurance company is a definitive departure from its current overseas business interests which have, up to now, concentrated on the so called ‘Anglo Saxon’ countries of the northern hemisphere – the UK and US. The South African company, whose home country has historic ties with the UK, is currently listed on the London Stock Exchange, operates financial services businesses in the UK and asset management services in the US.