Old Mutual in China U-turn

City A.M. Reporter
INSURER Old Mutual &nbsp;pulled out of buying a 49 per cent stake in China&rsquo;s ABN Amro Teda Fund Management yesterday as part of a drive to streamline its businesses.<br /><br />Old Mutual, South Africa&rsquo;s largest insurer, said in March it would scale back its expansion in Asia following a review of the company instigated by chief executive Julian Roberts.<br /><br />&ldquo;We didn&rsquo;t feel it was sensible at this time to pursue a growth strategy in the Asian region... that was one of the conclusions of the review that we did,&rdquo; an Old Mutual spokesman said.<br /><br />Old Mutual had agreed with ABN Amro Asset Management Asia and Fortis Bank to buy the stake in the Chinese fund manager in August 2008 for about &euro;165m (&pound;143m). However that was just a month before US investment bank Lehman Brothers collapsed, wreaking havoc across financial markets and sparking a wave of government-backed bank bailouts.<br /><br />At the time, the two sides said the sale of the stake, which had belonged to &nbsp;ABN Amro was forced by regulators after Fortis took on ABN&rsquo;s asset management business in April 2008.<br /><br />Old Mutual said yesterday its withdrawal from the deal incurred a penalty of &euro;45m. France&rsquo;s BNP Paribas has since taken control of Fortis Bank, formerly the Belgian banking arm of stricken financial group Fortis, which was broken apart by the Belgian and the Netherlands in October.