Prudential to sell all of US giant Jackson Life in potential $5 billion deal. Commits to keep HQ in London

The Prudential today said it would sell all of its $5 billion Jackson Life operation and signalled that it would keep its global headquarters in London.

The insurance giant, which split off its UK operations into a separate business now known as M&G Plc, signalled in March that a flotation of the Jackson business was its preferred option and today pledged to carry out such a sale, beginning in the first half of next year. A partial sale will be followed by further sell-downs "over time".

It recently completed a deal to bring in a new investor, Athene, into Jackson Life with a deal valuing the group at $4.5 billion, but that is seen as a conservative valuation for the whole group by most analysts.

Funds raised from the sale would be pumped into expanding its fast-growth Asian and African businesses.

The company has been under attack from a US activist hedge fund Third Point to focus its efforts more aggressively on the Asian business but the 172 year old insurer insists it was going to carry out such a plan anyway.

First half operating profits in its Asian division jumped 14% in figures published today.

Mike Wells, chief executive, said: "The board has decided to pursue the full separation and divestment of Jackson to enable the group to focus exclusively on its high-growth Asia and Africa businesses. This would result in two separately listed companies with distinct investment propositions, which we believe would lead to improved strategic outcomes for both businesses."

He said the Pru would have primary listings in London and Hong Kong plus secondary listings in Singapore and the US while Jackson would solely be listed in the US.

Proceeds from further sell-downs of the Jackson stake after the initial IPO would be used to provide investment in Asia and Africa while a new debt issuance for the Jackson business would enable the Pru to pay down some of its own group debt.

The move will see the Pru take on a new dividend policy based on the growth of Asia's free cash surplus. It will kick off with a first interim dividend for 2020 of 5.37 cents a share.