Discovery wagers R1,56bn on UK growth

12.05.10

DISCOVERY Holdings , SA’s largest medical scheme company, is to buy the UK’s fourth-largest private medical insurer, Standard Life Healthcare, for R1,56bn.

It is Discovery’s second big recent foray into global markets, after it said last December that it would acquire a 24,99% stake in China’s Ping An Healthcare from that country’s second-largest insurer, Ping An.

Discovery CEO Adrian Gore said yesterday that the Standard Life Healthcare acquisition, likely to be effective from July 31, would create a new competitor of scale in the UK with about 700000 members and attract annual premiums of about R4,1bn.

 I think it is a reasonable deal, as it gives them a lot more critical mass,” said Coronation Fund Managers analyst Neill Young. “Strategically, it’s an appropriate move, and the price they’ve paid is probably fair to slightly expensive. The key thing is the business is very much a scale business (in the UK) — they have tried, through Prudential, but haven’t achieved it so far. They had two options — either exit the market or make an acquisition,” he said.

 Gore said the purchase would provide PruHealth Holdings — the holding company of PruHealth and PruProtect, the joint ventures between Discovery and UK-based Prudential Assurance — with complementary assets to strengthen its competitive position.

Discovery has aimed to grow its presence in the UK since the launch of PruHealth in 2004, and Gore said organic growth — rather than the Standard Life acquisition — would have been a “slow and difficult process.........for more go to  ......

http://www.businessday.co.za/articles/Content.aspx?id=108646

 

 

© Copyright 2010. WDB. All Rights Reserved.       Donate Online   |   FAQ   |   Terms of Use   |   Privacy Policy   |   Sitemap
Designed by Helios Design
WDB Group WDB Micro Finance WDB Trust WDB Investment Holdings Grameen Bank