Old Mutual : Update on Managed Separation - Second scheme of arrangement effective and residual plc update

26June 2018 Update on Managed Separation - Second scheme of arrangement effective and residual plc update

Following the announcement by Old Mutual plc regarding, inter alia, the First Scheme becoming effective, and following the admission of Quilter Shares to the London Stock Exchange and the Johannesburg Stock Exchange, each on 25 June 2018, Old Mutual plc is pleased to announce that the Second Scheme of Arrangement became effective at 6.30 p.m. (London time) on 25 June 2018 after Court approval of the Second Scheme earlier that day. As a result, Old Mutual Limited is now the holding company of Old Mutual plc.

Following application by Old Mutual plc, it is expected that the UK Listing Authority will cancel the listing of Old Mutual plc Shares on the premium listing segment of the Official List and the London Stock Exchange will cancel the trading of Old Mutual plc Shares on the London Stock Exchange's main market for listed securities, in each case with effect from 8.00 a.m. (London time) today. In addition, it is expected that Old Mutual plc Shares will be delisted from the Johannesburg Stock Exchange, the Namibian Stock Exchange, the Zimbabwe Stock Exchange and the Malawi Stock Exchange on 29 June 2018.

Old Mutual plc also expects to announce the admission of, and commencement of unconditional dealings in, Old Mutual Limited Shares to the Johannesburg Stock Exchange, London Stock Exchange, the Namibian Stock Exchange, the Zimbabwe Stock Exchange and the Malawi Stock Exchange later today.

On 30 June 2018, the following directors will step down from the Old Mutual plc Board: Zoe Cruz, Alan Gillespie, Adiba Ighodaro, Ingrid Johnson, Vassi Naidoo and Patrick O'Sullivan. After 30 June, Mike Arnold, Danuta Gray, Bruce Hemphill, Trevor Manuel and Roger Marshall will remain members of a newly constituted Old Mutual plc Board.

Patrick O'Sullivan, Chairman of Old Mutual plc, said: 'I would like to thank my colleagues across the Group for their exceptional hard work in delivering the managed separation of Old Mutual. It has been an outstanding achievement to deliver the material completion of the managed separation six months ahead of schedule and on budget.

'Managed separation will unlock further value for shareholders over time. Each of the individual businesses is well positioned and I look forward to watching them grow and prosper in future years.

'When I joined Old Mutual plc as Chairman in January 2010, I promised that I would leave the businesses stronger and with attractive prospects in their respective markets. All four companies now meet these objectives as separate, independent firms.'

Update on development of Residual plc

The development of the Residual plc net asset value continues as set out in the circular published by Old Mutual on 20 April 2018 (the 'Circular'). Estimates of costs are at the upper end of Old Mutual plc's public guidance but remain tightly managed. Approximately 98% of the reinsurance obligations of Old Mutual Bermuda Reinsurance ('OMBRE') have now expired. The remainder of capital in OMBRE may be released to OM Group (UK) Limited and, in turn, to Old Mutual plc at a future stage subject to regulatory approval. Based on the anticipated developments to Residual plc set out in the Old Mutual plc 2017 Annual Results and on the information announced today and yesterday, 25 June 2018, our current best estimate of the economic value of Residual plc is c.£400 million. This estimate may change over time.

On the Second Scheme becoming effective, Old Mutual plc's pre-existing capital management policy expired and Old Mutual Limited's capital management policy became effective. Old Mutual plc has also ceased to be a regulated entity for the purposes of EU solvency capital calculations. Old Mutual Limited will remain subject, inter alia, to the undertaking to the UK Court as described in the announcement dated 20 June 2018 in respect of Old Mutual plc. Any potential transfer by Old Mutual plc will need to take into account, inter alia, the developments and future assessments by the Board of Old Mutual plc, at such a point in time, of liabilities and contingent liabilities and in line with its fiduciary duties.

BofA Merrill Lynch is acting as joint financial adviser and sponsor to Old Mutual in connection with the managed separation.

Rothschild is acting as independent financial adviser to Old Mutual on its managed separation.