UK insurer Old Mutual to sell Nordic unit to Sweden's Skandia Liv for £2.1 bn

Old Mutual Plc, the third-largest insurer in the UK, yesterday said that it plans to sell its Nordic operations to Sweden's Skandia Liv for £2.1 billion ($3.3 billion) in cash, in order to reduce its £1.5-billion debt and return capital to investors.

Skandia Liv, is a customer-owned insurance subsidiary of Old Mutual, which will operate independently once the sale is completed in the first quarter of next year.

London-based Old Mutual will sell Skandia Insurance Co. Ltd, includes Old Mutual's long-term savings and banking operations in Sweden, Denmark and Norway, but excludes Finland.

Old Mutual will retain ownership of and continue to use the Skandia brand in markets outside of Sweden, Denmark and Norway.

The unaudited pro-forma net assets of Skandia Insurance as at 30 June 2011 were £1.7 billion, had an operating profit before tax of £60 million for the six month period to 30 June 2011.  

Old Mutual, Africa's biggest insurer, bought Stockholm-based Skandia AB, for $8 billion in 2006 in order to enter the Nordic region and boost its revenue in the UK, where Skandia AB generates nearly half of its revenue.