Prudential gives details of £14.5bn rights issue


Last Updated at 17 Apr 2014, 11:30 ET *Chart shows local time Prudential intraday chart
price change %
1324.00 p +

Related Stories

Insurance giant Prudential has announced plans to raise £14.5bn ($21bn) from shareholders in the UK's biggest rights issue to date.

The extra cash will be used to fund Prudential's planned acquisition of AIA Group - AIG's Asian business.

Prudential's chairman Harvey McGrath called the proposed deal "a unique opportunity".

Details of the rights issue were due two weeks ago, but were delayed after concerns from regulators.

The Financial Services Authority (FSA) complained that the AIA deal could leave the new merged company with insufficient capital, but those worries now appear to have been resolved.

Asia growth

If agreed by shareholders, the acquisition of AIA will see the size of Pru's business more than double in size, with its Asian operations accounting for more than half of its profits.

Start Quote

No one can accuse the Prudential's senior directors of being averse to risk”

End Quote Robert Peston Robert Peston, BBC business editor

It will also make the Pru the largest insurer in Asia, and the biggest life assurer outside of China.

The Pru currently has about seven million customers in the UK, while AIA has about 30 million customers in Asia.

There is also widespread speculation that the Pru will eventually pull out of the UK and the US completely, making it an Asian-focused business with its headquarters in London.

Prudential's chief executive Tidjane Thiam has set ambitious growth targets for the proposed merged company, with a pre-tax operating profit of at least £3.26bn planned by 2013.

"The combined business will be a fast growing and highly profitable company, with a leading position in many of the most attractive markets in the world," he said.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories



  • Two women in  JohanesburgYour pictures

    Readers' photos on the theme of South Africa

  • Worcestershire flagFlying the flag

    Preserving the identities of England's counties

  • Female model's bottom in leopard skin trousers as she walks up the catwalkBum deal

    Why budget buttock ops can be bad for your health

  • The OfficeIn pictures

    Fifty landmark shows from 50 years of BBC Two

  • French luxury Tea House, Mariage Freres display of tea pots Tea for tu

    France falls back in love with tea - but don't expect a British cuppa

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.