Prudential, M&G Split: What Happens To Investor Stock In A Spinoff?

The long-awaited split between Prudential Public Limited Company PUK and its subsidiary M&G gives investors the option to target their investment in their preferred portion of the insurance and asset management business.

Prudential will focus more on Asian markets, while the newly demerged M&G takes on a broader approach, focusing on expanding globally. This may leave you wondering: what happens to my stock?

What Happened

In an effort to simplify operations and grow more effectively, Prudential split its business segments into two companies.

In a spinoff, shares of the new company are distributed to shareholders of the parent company. In this case, for each Prudential share that investors own, they will receive one share of M&G. New investors can also own the stock, which is listed on the London Stock Exchange.

Why It Matters

"The board believes the demerger will help Prudential and M&G to become more closely aligned to the interests of their customers and shareholders," Prudential Chairman Paul Manduca said in a statement. 

Prudential split into two because the company believes it's best for shareholders.

What's Next

One thing to keep an eye out for in Prudential is the health of the overall Asian market, which the company identified as their focus, and news around the ongoing U.S.-China trade war and protests in Hong Kong.

Prudential shares were trading 0.46% higher at $91.30 at the time of publication. 

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Photo by DAVID ILIFF. License: CC BY-SA 3.0