South African life insurer Sanlam Ltd has announced plans to acquire the remaining 53.4% stake in SAHAM Finances, the insurance subsidiary of SAHAM Group, in a US $1.05 billion acquisition deal.
Sanlam already owns a 46.6% stake in SAHAM Finances, and the companies have been partners since February 2016.
With a market capitalisation of over $16 billion, Sanlam is already a leading Pan-African financial services group, and the acquisition of this new insurance business, which operates over 26 countries and through 35 insurers, will significantly enhance its position on the continent.
The parties have disclosed that the $1.05 billion transaction is to be funded through a combination of available capital, debt facilities, and the issuance of equity instruments.
The deal follows a 1.4% drop in full-year profit for Sanlam, driven by South-African market recession, and the insurer has indicated that it hopes the acquisition will boost its exposure to both high-growth markets and general insurance products across sub-Saharan and North Africa.
Additionally, the sale of SAHAM’s insurance business completes the Group’s transformation into a Pan-African Investment Fund.
The transaction is subject to agreements by various regulators, but is expected to be completed during the second half of 2018.
