Old Mutual offloads U.S. unit for $350 million

LONDON: Sprawling Anglo-South African financial conglomerate Old Mutual reported forecast-beating half year profit and said it had sold its U.S. life insurance business in a drive to simplify its structure.

The disposal is the first step in a strategic overhaul to slim down Old Mutual, an insurer, bank and fund manager operating in 35 countries, amid investor concerns the group s complexity has held back its share price.

Old Mutual is selling the U.S. unit to hedge fund Harbinger Capital Partners for $350 million, and the proceeds will be used to repay debt, it said on Friday.

Old Mutual s shares rose as much as 5.3 percent, but by 1400 GMT (10 a.m. EDT) had fallen back to stand 1 percent higher at 124.8 pence, still outperforming a flat FTSE 100 share index.

"We believe the market will like the announced sale of U.S. life," JP Morgan Cazenove analysts wrote in a note.

"We like that management is simplifying and focusing Old Mutual."

Chief executive Julian Roberts declined to comment on whether the restructuring will also include a sale of Old Mutual s flagship asset, its majority stake in Nedbank (NEDJ.J), South Africa s fourth-biggest lender.

Emerging markets lender Standard Chartered (STAN.L) wants to buy a stake in Nedbank, a source told Reuters in May, while Europe s biggest lender, HSBC (HSBA.L), is also interested in bidding, according to a report last month.