PRUDENTIAL PLC By Simon Clark
U.K. insurer Prudential PLC has taken a step back from the U.S. as it focuses on Asia, agreeing to sell a stake in its U.S. business to Athene Holding Ltd. for $500 million.
The investment from Athene, which is backed by New York buyout firm Apollo Global Management Inc., comes as Prudential prepares an initial public offering for its U.S. unit. The unit includes Jackson National Life Insurance Co. and asset manager PPM America Inc. Athene also agreed to reinsure a $27.6 billion portfolio of Prudential's U.S. annuity liabilities.
"Prudential continues to prepare for a minority IPO of Jackson alongside the active evaluation of other options to create an independent U.S. business," the London-based insurer said in a statement Thursday.
Prudential said in August that its Asian operations were driving growth and that it would use "third-party financing" to expand its U.S. business. In October, the 172-year-old insurer spun off its giant U.K. fund management unit M&G PLC.
Prudential Chief Executive Mike Wells told investors on a call Thursday that the deal with Athene for the sale of the 11.1% minority stake in its U.S. business enabled investors to "benefit to the fullest extent possible from the opportunity presented by our Asia business" and "pursue a path for an independent Jackson."
Shareholders have been pushing for a breakup of Prudential. In February, activist hedge-fund firm Third Point LLC called on the British insurer to separate its U.S. and Asian operations, saying such a move would increase growth and drive value.
Third Point said in a February letter to Prudential's board that its Asian arm was "materially undervalued" by investors because it is tied to Jackson, which it said is "extremely complex to analyze."
Apollo is the largest shareholder in Bermuda-based Athene.
"Jackson has complementary distribution capabilities relative to Athene's business," Apollo co-founder Marc Rowan said in the statement.
Write to Simon Clark at simon.clark@wsj.com
