Old Mutual’s Hostile Takeover of Skandia
THE HISTORY OF OLD MUTUAL Old Mutual had a history of more than 150 years as a South-Africanbased mutual society before its public listing in 1999. Back in 1845, a Scotsman named John Fairbairn led a group of 166 members in the formation of South Africa’s first mutual life assurance society. Old Mutual grew strongly right up to the end of the nineteenth century, and soon claimed to be one of South Africa’s leaders in the life assurance market. When the country gained self-government from the UK and became a member of the Commonwealth Union in 1910, Old Mutual became one of South Africa’s most dominant institutions, capturing as much as onethird of the country’s life assurance market. In the face of the government’s strict exchange controls, Old Mutual – akin to many other South African companies – focused its energy primarily on the domestic market. Similarly, the society’s investment portfolio reflected the increasing ostracism of the apartheid state. Unable to invest in corporations outside South Africa, Old Mutual became a major shareholder in a number of South African financial institutions such as Nedbank, Swiss-based Richemont, Rembrandt, Standard Bank, Barloworld and Anglo American. Old Mutual’s position in South Africa had become strong. Throughout its history, it had actively recruited South Africa’s non-European population into its membership, in part by actively promoting group memberships and group-based insurance, and other financial products. By the 1990s, Old Mutual held 25 per cent of the country’s industrial assets through its life and asset management operations, and...
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