Fees bonanza after Old Mutual sell-off

The moribund City deal market got an injection of life yesterday when Old Mutual said it would offload its Nordic business for £2.1bn.

Old Mutual, a sprawling insurance conglomerate that has been trying to slim down for several years, is selling Skandia Insurance to namesake Swedish insurer Skandia Liv.

That is a welcome fee bonanza for the banking advisers Evercore Partners, Morgan Stanley, Bank of America Merrill Lynch and Deutsche Bank, who might typically get 2 per cent of the deal's value.

The move is chief executive Julian Roberts' latest move to rationalise the company. Since listing in London in 1999, the South African-based firm quickly expanded into 30 countries.

Mr Roberts said: "The transaction will also enable us to reduce complexity within the group consistent with our stated strategy, and to focus more sharply on those parts of our long-term savings business where the greatest opportunities are available."

He said the disposal had "absolutely no implications" for the company's UK Skandia subsidiary, which remains "a key business".

In a note, Goldman Sachs said: "This sale price is significantly in excess of our sum of the parts component for these businesses of £1.4bn."