Disposal

Prudential PLC
14 November 2002

Thursday 14 November 2002


PRUDENTIAL AGREES SALE OF ITS GERMAN LIFE BUSINESS TO CANADA LIFE

Prudential plc have has agreed the sale of their its German life insurance
business to Canada Life Financial Corporation for a total total consideration of
€129 million (eq. £82 million).

Prudential's German business consists of a marketing and distribution operation
that specialises in selling unit-linked products through the intermediary
channel. Policies are underwritten through a Dublin-based life insurance
company.

The transaction involves:


  • The sale of the German-based sales and marketing company SALI Management
    Services Ltd (SAMS).

  • The transfer to Canada Life Assurance (Europe) Ltd of the German portfolio
    of approximately 115,000 life insurance contracts sold almost exclusively
    under the Scottish Amicable Life International (SALI) brand and underwritten
    by Prudential International Assurance (PIA) in Dublin.

  • All 167 members of SAMS staff in Germany will transfer to Canada Life. In
    addition, 65 staff of Prudential Europe Management Services Limited (PEMS)
    in Ireland who work on business relating to the German life operation will
    transfer to Canada Life in Dublin.

The transaction is expected to become effective on 1 January 2003 and requires
approval from the Irish High Court for the transfer of the portfolio as well as
other relevant regulatory clearances. Court approval is anticipated by the end
of April 2003.


Commenting on the transaction, Mark Wood, Chief Executive of Prudential UK &
Europe, said: 'Canada Life is a natural purchaser for our German business and we
believe that this transaction is an excellent outcome for employees, customers
and shareholders.

'We will continue to run our existing operations in France for value; in
particular, we will continue to pursue new distribution opportunities in France
to sell our successful Prudential Europe Vie equity-backed life insurance
product'.

certain back office capabilities in Dublin, principally staff, will transfer to
Canada Life.


The sale follows the review by Prudential of the opportunities for its
Prudential-branded businesses in continental Europe, details of which were
announced at the Group's Interim Results in July 2002 (see Notes to Editors).


The sale proceeds, after repayment of financial reinsurance balances outstanding
of approximately €70 million, will be used for general corporate purposes as
part of the ongoing development of Prudential Group.


The sale does not affect either M&G's or Egg's existing operations in Europe,
both of which are well positioned to capitalise on the growth prospects in their
chosen markets.

                                     -ENDS-

ENQUIRIES TO:-

Media:                                          Investors and Analysts:

Prudential UK & Europe                          Rebecca Burrows/Laura Presland
James Murray/Darragh Leeson                     020 7548 3537/3511
020 7150 2654/2600
                                                David Doyle
Prudential Group                                020 7548 3753
Steve Colton/Clare Staley
020 7548 3721/3719

NOTES TO EDITORS:


1. Prudential's international life assurance business in Germany was launched in
1995 under the Scottish Amicable brand and specialises in unit-linked products
sold via intermediaries. As at 30 September 2002, it had around 115,000 policies
in force. It comprises a sales and marketing company called SALI Management
Services Ltd (SAMS) which distributes the life products of the Dublin Life
Company, Prudential International Assurance plc (PIA), under Freedom of Services
provisions.


SAMS markets products underwritten by PIA under the SALI brand and sold via
independent intermediaries or equivalents. Two products are sold under the
Prudential brand: Dachfonds, mutual funds product distributed by DWS, a
subsidiary of Deutsche Bank; and Pru Generation, a unitised with-profits
product.


Most supporting activities in respect of the German business underwritten by PIA
are carried out by Prudential's Dublin-based third party administration (TPA)
company, Prudential Europe Management Services Ltd (PEMS).


The transaction also includes the sale of Signal lduna Prudential International
Assurance (SIP). SIP was formed in 1999 as a joint venture with Signal Iduna, a
leading German life and health assurer, to sell a unit-linked Long Term Care
Bond. Prudential acquired Signal Iduna's 50 per cent stake in SIP in October
2002.


2. As part of the transaction, 65 PEMS employees who are engaged in the support
of the German life business, will transfer to Canada Life Europe. 307
Dublin-based Prudential employees will continue to service Prudential
International's offshore business and Prudential Europe's ongoing operations in
France as well as providing a TPA service to St James Place International. In
Germany, the entire SAMS staff, 167 in total, will transfer to Canada Life
Europe.


3. At its Interim Results in July, Prudential announced the conclusions of a
review of its Prudential-branded businesses in continental Europe. In summary,
these conclusions were that an organic strategy would at present be too slow and
expensive to create value and acquisitions would be necessary to give the Group
scale. It was also clear that the returns achievable would be too low to justify
any significant investment of capital and that there is little opportunity for
short to medium-term growth. It was decided, therefore, to run Prudential's
existing operations in continental Europe for value but not push for growth.


This decision does not affect either M&G or Egg's existing operations in Europe,
both of which are well positioned to capitalise on the growth prospects in their
chosen markets.


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