Page last updated at 10:43 GMT, Tuesday, 11 May 2010 11:43 UK

Standard Life sells healthcare division

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Standard Life says its healthcare arm is not core to its strategy

Edinburgh-based finance firm Standard Life is to sell its private medical insurance arm for £138m to the South African group Discovery Holdings.

Standard Life said its healthcare arm was not core to its UK strategy and it would focus on the long-term savings and investments market.

A total of 562 employees will transfer to the new company as part of the transaction.

The deal needs regulatory approval but should go ahead by 31 July.

Standard Life Healthcare is the fourth largest provider of private medical insurance (PMI) in the UK and last year made a profit before tax of £9.4m.

Chief executive of Standard Life, David Nish, said: "Standard Life Healthcare is a leading and successful business in the UK PMI market, but in the context of sharpening our strategic focus on the long-term savings and investments market we concluded it is not core."

He added: "The sale provides an excellent outcome for Standard Life Healthcare's customers, commercial partners and employees as well as for Standard Life's shareholders."

Discovery Holdings is listed on the Johannesburg stock exchange, with a market capitalisation of £1.9bn.

It operates in insurance and long-term savings in South Africa, the UK, the United States and China.

In the UK, Discovery runs a medical insurance joint-venture with Prudential plc.

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