Prudential plans to combine its fund manager M&G and Prudential UK & Europe to form M&G Prudential, a combined business managing £332bn of assets for 6m customers.

Prudential says that combining the business will create more opportunities to target a growing customer demand for “comprehensive financial solutions.” The move is likely to produce cost savings of £145m per year by 2022 although details of the cost savings have not been released yet.

The company says that the new entity will combine M&G's active investment expertise with Prudential UK&E's capabilities in volatility-adjusted savings and liability-driven investment to provide more choice for customers across both brands through retail, institutional and direct channels.

The unified business will also be better positioned to develop and fund joint product propositions and to build new digital service and distribution to meet fast changing customer needs, says Prudential.

This investment and associated cost savings, will be shared between M&G, and Prudential UK&E's with-profits and shareholder businesses, with shareholders expected to contribute about £250 million towards the investment and to benefit from cost savings of £145 million per annum by 2022.

John Foley, currently chief executive of Prudential UK&E, will become chief executive of M&G Prudential and will remains a member of the Prudential plc Board. Anne Richards will remain chief executive of M&G and a member of the Prudential plc Board. Both Anne Richards and Clare Bousfield, CEO Insurance for Prudential UK&E, will become deputy chief executives of M&G Prudential.

Further details about M&G Prudential will be presented at Prudential plc's Investor Conference in London on 16 November.

John Foley, chief executive of M&G Prudential, said: "Prudential UK&E and M&G both offer well designed solutions which help investors meet their most important financial goals. Combining their complementary strengths allows us to provide greater choice to a wider range of customers."

Anne Richards, chief executive of M&G, said: "This is an exceptional opportunity to bring together M&G's extensive investment capabilities and Prudential UK&E's expertise in balance sheet management. It will enable our investment teams to offer their expertise to a wider range of customers and across a broader range of investment and savings formats, while continuing to provide our current clients with the same high level of service."

Mike Wells, Prudential plc group chief executive, said: "In recent years, we have seen a convergence in the investments and savings markets with customers across all geographies and demographics demanding more comprehensive solutions to their financial needs. Bringing together these two high-quality businesses, while transitioning to a capital-light model, will enable M&G Prudential to increase its growth prospects by providing better outcomes for our millions of customers and in turn generate strong returns for our shareholders."