The Pru posted a 5 per cent rise in half-year operating profit to £2.36billion, driven by demand for its products in Asian markets.
The combined M&G Prudential business will manage £332billion of assets for more than six million customers.
Annual cost savings of £145million are expected by 2022.
The group said it regularly reviews its structure and would not comment on a potential break-up of the business or possible job cuts.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “There has been speculation for some time that Prudential might seek to split its mature UK business from the rapidly growing US and Asian operations.
“That makes the decision to merge the UK life and M&G asset management businesses into a single operation, M&G Prudential, a significant one.
“The combined business would bear a remarkable resemblance to several other UK life businesses, and the success of the defined contribution pension scheme-focused PruFund would seem to provide a model for a viable standalone future.
“There’s no need to get rid of the UK business, but today’s move would make it a lot simpler.”