Old Mutual has agreed to sell its Latin American businesses to a Chinese holding company as the South African firm turns its attention to its home continent.
The company is selling Old Mutual Colombia, Old Mutual Mexico and Uruguay-based investment platform and wealth firm Aiva to CMIG International, a Chinese group based in Singapore, it announced in a statement March 16.
The price was not disclosed in the statement, however according to sources familiar with the businesses are being sold for around $300 million.
'The decision to sell Old Mutual's Latin American operations followed a strategic review in which it was concluded that Old Mutual Emerging Markets should prioritise its sub-Saharan African businesses,' the firm said in a statement.
The deal is subject to regulatory approvals, and Old Mutual will continue running the businesses until the transcation gets the green light.
Old Mutual entered Colombia and Mexico in 2006 when it acquired Swedish financial group Skandia, whose brand was phased out in 2008. CMIG plans to reintroduce the Skandia name to the market once the acquisition is complete, according to the statement.
The South African firm then acquired a majority stake in Aiva in 2012. The firm currently has a distribution agreement with UK-based Old Mutual Wealth, both to use its international investment platform as well as to market Old Mutual Global Investment's funds. The deal should continue after the sale, a spokesperson for Old Mutual told Citywire Americas.
The Colombia business provides pensions, life insurance, mutual funds, brokerage service, while the Mexico operation offers life insurance and mutual funds, according to the statement.
Commenting on the deal, CMIG executive vice chariman Kevin E. Lee said: 'Old Mutual Latin America is a well run company with constant and sustained growth.'
'In CMIG International we have a long-term commitment to strenghten and growth the company in the region. The acquisition of Old Mutual Latin America is an excellent platform for CMIG International, for its foray into the regional market, which has a lot of potential.'