Old Mutual receives SA Competition Commission recommendation

Peter Moyo, CEO-designate of Old Mutual Limited.

Old Mutual Emerging Markets welcomes the constructive and supportive engagements with the Minister for Economic Development, his Department and the South African Competition Commission on the proposed corporate restructure taking place as part of Old Mutual plc’s managed separation strategy.

The recommendation for approval by the Competition Commission to the Competition Tribunal for the newly incorporated Old Mutual Limited to acquire Old Mutual plc - with the conditions agreed to between Old Mutual Emerging Markets and the Economic Development Department - is a significant step towards the listing of Old Mutual Limited as a standalone entity this year.

“We are excited about the homecoming of Old Mutual back to Africa. Old Mutual partners with its customers and the communities in which it operates to build financial wellbeing, and, through financial inclusion, to enable inclusive economic growth. Old Mutual Limited will be an independent and focused business, better able to serve our broad stakeholder group. The listing of Old Mutual Limited on the JSE signals our commitment to and vote of confidence in the South African financial markets, and in South Africa as an attractive investment destination,” says Peter Moyo, CEO-designate of Old Mutual Limited.

Agreement with the Economic Development Department

Old Mutual Emerging Markets and the Economic Development Department have reached agreement in relation to three critical public interest issues that Old Mutual Limited will address: Black Economic Empowerment (BEE) Ownership, Employment and Enterprise and Supplier Development.

Old Mutual Limited will be committed to BEE ownership as part of its broader commitment to transformation. As a consequence of the corporate restructuring, it is possible that Old Mutual Limited’s BEE ownership score, reported as a JSE primary listed entity and measured in terms of the revised Financial Services Code, may move to slightly below the regulatory target of 25%. Old Mutual Emerging Markets is still considering the impact of the revised Financial Services Code, that came into effect on 1 December 2017, on its BEE score. To the extent that Old Mutual Limited’s BEE ownership is less than 25%, Old Mutual Emerging Markets has committed to Old Mutual Limited attaining at least 25% within three years of its primary listing on the JSE and then to that of the peer group “best of class”, within 5 years, starting from the date of listing. Old Mutual Limited will consider appropriate mechanisms to achieve its BEE ownership targets in due course.

Old Mutual Limited will be a substantial direct and indirect employer in the countries in which it operates. Old Mutual Limited has furthermore undertaken that there will be no involuntary job losses as a result of the corporate restructuring. Indeed, it anticipates that new roles in South Africa will be created to undertake some of the functions that were previously performed by the head office in the UK. This does not change OMEM’s commitment to cost leadership as previously announced.

Old Mutual Emerging Markets has to date invested R2 billion in initiatives aimed at entrepreneurship and SMME development and job creation through various vehicles such as the Old Mutual Foundation, Masisizane Fund and Black Distributors’ Trust. In addition, it has over R1 trillion of funds under management, which are largely invested in the South African market. These investments have a material impact on creating and maintaining employment and supporting the South African economy.

To further enhance employment in South Africa, Old Mutual Limited will allocate a further R500 million to a new ring-fenced Enterprise Supplier Development Fund to support small businesses and Black-owned businesses. This will be done over a three year period following the listing of Old Mutual Limited. Old Mutual Limited has committed to designate senior leaders to coordinate and oversee all its enterprise development activities, including the management of this new fund.

These commitments in South Africa form an important part of delivery by Old Mutual Limited of positive benefits for all regional stakeholders such as its customers, employees, partners, government and investors. Old Mutual Limited will continue OMEM’s principles of good governance, prudent capital management and asset allocation, across its businesses and undertakes to continue to contribute to a sustainable society.