Prudential sells Jackson equity stake to Apollo-backed Athene for US$500m

[LONDON] Prudential has sold a minority stake in its US business, Jackson, to Apollo Global-backed Athene Holding for US$500 million, the insurer said on Thursday, in the first phase of its plan to create an independent US business. The London-listed, Asia-focused insurance firm, which is also regulated in Hong Kong has been looking for ways to bring external capital into the US annuity provider and said it would continue to evaluate other options for the part of Jackson it still owned, including a minority initial public offering.

The end goal was to create an independent US business, Prudential said, adding that the Athene investment was expected to close in July.

Shares in the company were trading 7.8 per cent higher at 9.35am GMT (5.35pm SGT).

In addition, Prudential said Athene - which counts Leon Black's Apollo Global Management as its biggest shareholder- would fully reinsure US$27.60 billion of Jackson's in-force fixed and fixed indexed annuity portfolio from June 1.

The combined effects of investment and reinsurance transactions are expected to raise Jackson's risk-based capital cover ratio by 80 percentage points, Prudential said.

REUTERS