So Old Mutual has slapped a for-sale sign on its US business. Speculation is rife that the insurer may also offload its European business Skandia, to concentrate on expanding its presence in Africa.
Wouldn’t that be a rich irony? After pouring billions of rand down the drain in disastrous overseas ventures, the geniuses who run Old Mutual may find themselves back where they started: at the helm of a (highly profitable) South African life insurer.
The share price tells the story: reacting to the news of the planned sale, it jacked up more than 3% to R13.22, what it was at the IPO. If you bought Old Mutual shares five years ago – in the midst of one of the biggest market booms in history – you would still be down 10% today. If you’d bought Sanlam, which chose to stay in South Africa, you’d be 85% better off.