Much to lose, much to prove for Old Mutual
Insurance giant is withdrawing from India to focus on its African assets as Sanlam and MMI pile in
Old Mutual CEO Bruce Hemphill wasn’t kidding when he said the emerging markets business was going to refocus on Africa. This was a radical change of strategy from a pan-emerging markets business with operations in India, China, Mexico and Colombia. But less than two months after the announcement, Old Mutual has sold its 26% holding in India’s Kotak Life Insurance. On the face of it, it is an honourable retreat bringing in £141m. This is a large premium on the carrying value in Old Mutual’s balance sheet of £45m. Of course, these carrying values are often highly conservative. But Old Mutual spokesman William Baldwin-Charles says it was a good deal at 3.5 times the book value. There was a ready buyer in Old Mutual’s partner, the Kotak Mahindra group, which is one of India’s largest private-sector banking and financial services groups, and a large car and tractor manufacturer. As the stake was somewhat illogically owned by Old Mutual Plc in London and not by Old Mutual Emerging Markets...
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