SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November, 2002
PRUDENTIAL PUBLIC LIMITED COMPANY
(Translation of registrant's name into English)
LAURENCE POUNTNEY HILL,
LONDON, EC4R 0HH, ENGLAND
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-
Thursday 14 November 2002
PRUDENTIAL AGREES SALE OF ITS GERMAN LIFE BUSINESS TO CANADA LIFE
Prudential plc has agreed the sale of its German life insurance
business to Canada Life Financial Corporation for a total consideration of
EUR129 million (eq. GBP82 million).
Prudential's German business consists of a marketing and distribution operation
that specialises in selling unit-linked products through the intermediary
channel. Policies are underwritten through a Dublin-based life insurance
company.
The transaction involves:
- The sale of the German-based sales and marketing company SALI Management
Services Ltd (SAMS).
- The transfer to Canada Life Assurance (Europe) Ltd of the German portfolio
of approximately 115,000 life insurance contracts sold almost exclusively
under the Scottish Amicable Life International (SALI) brand and underwritten
by Prudential International Assurance (PIA) in Dublin.
- All 167 members of SAMS staff in Germany will transfer to Canada Life. In
addition, 65 staff of Prudential Europe Management Services Limited (PEMS)
in Ireland who work on business relating to the German life operation will
transfer to Canada Life in Dublin.
The transaction is expected to become effective on 1 January 2003 and requires
approval from the Irish High Court for the transfer of the portfolio as well as
other relevant regulatory clearances. Court approval is anticipated by the end
of April 2003.
Commenting on the transaction, Mark Wood, Chief Executive of Prudential UK &
Europe, said: "Canada Life is a natural purchaser for our German business and we
believe that this transaction is an excellent outcome for employees, customers
and shareholders.
"We will continue to run our existing operations in France for value; in
particular, we will continue to pursue new distribution opportunities in France
to sell our successful Prudential Europe Vie equity-backed life insurance
product".
The sale follows the review by Prudential of the opportunities for its
Prudential-branded businesses in continental Europe, details of which were
announced at the Group's Interim Results in July 2002 (see Notes to Editors).
The sale proceeds, after repayment of financial reinsurance balances outstanding
of approximately EUR70 million, will be used for general corporate purposes as
part of the ongoing development of Prudential Group.
The sale does not affect either M&G's or Egg's existing operations in Europe,
both of which are well positioned to capitalise on the growth prospects in their
chosen markets.
-ENDS-
ENQUIRIES TO:-
Media: Investors and Analysts:
Prudential UK & Europe Rebecca Burrows/Laura Presland
James Murray/Darragh Leeson 020 7548 3537/3511
020 7150 2654/2600
David Doyle
Prudential Group 020 7548 3753
Steve Colton/Clare Staley
020 7548 3721/3719
NOTES TO EDITORS:
1. Prudential's international life assurance business in Germany was launched in
1995 under the Scottish Amicable brand and specialises in unit-linked products
sold via intermediaries. As at 30 September 2002, it had around 115,000 policies
in force. It comprises a sales and marketing company called SALI Management
Services Ltd (SAMS) which distributes the life products of the Dublin Life
Company, Prudential International Assurance plc (PIA), under Freedom of Services
provisions.
SAMS markets products underwritten by PIA under the SALI brand and sold via
independent intermediaries or equivalents. Two products are sold under the
Prudential brand: Dachfonds, mutual funds product distributed by DWS, a
subsidiary of Deutsche Bank; and Pru Generation, a unitised with-profits
product.
Most supporting activities in respect of the German business underwritten by PIA
are carried out by Prudential's Dublin-based third party administration (TPA)
company, Prudential Europe Management Services Ltd (PEMS).
The transaction also includes the sale of Signal lduna Prudential International
Assurance (SIP). SIP was formed in 1999 as a joint venture with Signal Iduna, a
leading German life and health assurer, to sell a unit-linked Long Term Care
Bond. Prudential acquired Signal Iduna's 50 per cent stake in SIP in October
2002.
2. As part of the transaction, 65 PEMS employees who are engaged in the support
of the German life business, will transfer to Canada Life Europe. 307
Dublin-based Prudential employees will continue to service Prudential
International's offshore business and Prudential Europe's ongoing operations in
France as well as providing a TPA service to St James Place International. In
Germany, the entire SAMS staff, 167 in total, will transfer to Canada Life
Europe.
3. At its Interim Results in July, Prudential announced the conclusions of a
review of its Prudential-branded businesses in continental Europe. In summary,
these conclusions were that an organic strategy would at present be too slow and
expensive to create value and acquisitions would be necessary to give the Group
scale. It was also clear that the returns achievable would be too low to justify
any significant investment of capital and that there is little opportunity for
short to medium-term growth. It was decided, therefore, to run Prudential's
existing operations in continental Europe for value but not push for growth.
This decision does not affect either M&G or Egg's existing operations in Europe,
both of which are well positioned to capitalise on the growth prospects in their
chosen markets.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date 15 November 2002
PRUDENTIAL PUBLIC LIMITED COMPANY
By: /s/ Steve Colton
Steve Colton
Group Head of Media Relations