CGNU Sale of Subsidiary

CGNU PLC
30 June 2000


CGNU AGREES SALE OF SOUTH AFRICAN GENERAL
INSURANCE BUSINESS

Following the earlier announcement of negotiations, CGNU
has agreed terms for the sale of its 51% stake in its
South African general insurance business to Mutual &
Federal Insurance Company Limited.

The business had net premium income of £137m in 1999 and
net assets of £100m at 31 December 1999.

CGNU's South African subsidiary is a listed company in
South Africa and in the announcement to the Johannesburg
Stock Exchange that follows, is referred to as 'CGU'.


Enquiries:

Steve Riley, Investor Relations Director  + 44(0)20 7662 8115


NOTES TO EDITORS

*  CGNU was formed by the merger of CGU and Norwich Union,
   which completed on 30 May 2000.

*  CGNU is the largest UK based insurance group and a  top
   five  European  life  insurer  with  worldwide  premium
   income and retail investment sales of £26bn.  It is the
   second  largest UK based fund manager with over  £200bn
   of assets under management.


   ANNOUNCEMENT TO THE JOHANNESBURG STOCK EXCHANGE

                  JOINT ANNOUNCEMENT OF
 PROPOSED ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL
               OF CGUH BY MUTUAL & FEDERAL
                           AND
             FURTHER CAUTIONARY ANNOUNCEMENT



1.   Introduction

     Further to the cautionary announcement dated 15 June
     2000, shareholders are advised that Mutual & Federal
     has  entered  into agreements with CGU International
     Holdings  B.V. and Metropolitan (together 
     'the Vendors'), which  collectively  own 79%  of the  
     issued  share capital  of CGUH. In terms of these 
     agreements, the Vendors  have irrevocably undertaken 
     to either  vote in favour of a scheme of arrangement 
     to be proposed, or  accept an offer to be made, by 
     Mutual &  Federal (collectively, 'the offer').
     
     It is the firm intention of Mutual & Federal to make
     the offer on the terms and conditions set out below.
     
     Nedcor Investment Bank Limited has confirmed to the
     Securities  Regulation Panel ('SRP') that  Mutual  &
     Federal   has   the  necessary  cash  resources   to
     implement the offer.
     
2.   Terms of the offer

     The offer consideration payable in cash by Mutual  &
     Federal for the entire issued share capital of  CGUH
     pursuant  to  the  offer shall be  the  sum  of  the
     following:
     
     -    The audited consolidated net tangible asset value 
          of CGUH as at 31 May 2000 ('NTAV'); and
     -    R190 000 000.
     
     The offer consideration will be determined once
     the  NTAV  has been finalised. As soon  as  this has
     been completed, a further announcement, giving full 
     details of the offer and the financial effects on 
     CGUH, Mutual & Federal and Metropolitan shareholders, 
     will be made.

3.   Conditions precedent

     The   making  of  the  offer  is  subject   to   the
     fulfilment, inter alia, of the following conditions:

     *  the  satisfactory outcome of a due diligence  review
        of CGUH by Mutual & Federal;
     *  the  approvals of  the  Registrar  of   Short-term
        insurance and the approval of such other regulatory
        authorities as may be legally required;
     *  the  approval of the relevant documentation  by  the
        Johannesburg Stock Exchange  and  the SRP;
     *  the approval in general meeting by the shareholders
        of Mutual & Federal of the acquisition; and
     *  if applicable, the approval of the scheme of
        arrangement  by CGUH shareholders and the sanctioning
        thereof by the High Court.

4.   Opinions and recommendations

     The CGUH Board of Directors ('the Board') has appointed 
     Brait Merchant Bank Limited ('Brait') to advise them 
     regarding the terms of the offer.  The opinion of Brait 
     and the Board will be announced to CGUH shareholders 
     upon the offer being made.

5.   Further cautionary announcement

     Further announcements will be made once the NTAV has been 
     finalised and the due diligence of CGUH has been completed.
     Accordingly, shareholders of Mutual & Federal, CGUH and 
     Metropolitan are advised to continue to exercise caution
     until a further announcement is made.