Sanlam is ready to press ahead with the sale of a 5% stake to black investors as the South African insurer nears the finish line with its purchase of Morocco’s Saham Finances SA.
The Cape Town-based financial-services group announced Thursday it had satisfied all conditions to proceed with its plan to snatch up the shares of Saham Finances it doesn’t already own for $1.1 billion. The acquisition, its biggest ever, will make the company the largest insurer in Africa by geographical spread, with operations spanning 34 countries offering life, general and specialist cover.
After raising capital to finance part of the deal in March, Sanlam decided to hold off issuing further shares to fund the rest as it sought regulatory approval. With that in the bag, “we will proceed on the BEE deal,” Chief Executive Officer Ian Kirk said by phone, referring to black economic empowerment, South Africa’s drive to put more control of the economy into the hands of the black majority oppressed during racial segregation rule.
The deal will help Sanlam restore its capital reserves to between R2 billion ($137 million) and R3 billion, Kirk said. Ubuntu Botho, a black investment consortium lead by South African billionaire Patrice Motsepe, is Sanlam’s anchor empowerment partner.
Sanlam, which now owns 90% of Saham Finances, will also now begin merging its operations with the Casablanca-based firm. Saham Finances CEO Nadia Fettah and deputy CEO Emmanuel Brule will retain their positions and join the Sanlam Emerging Markets executive committee, headed by Junior Ngulube, the company said in a statement. Santam, a property and casualty insurer controlled by Sanlam, will own the remaining 10% of Saham Finances.
“It will take a bit of time to get the synergies through, but I am confident people know what they need to do,” Kirk said.
Here are some other comments from interview:
On selling Sanlam’s asset-management unit following Investec’s plan to split some of its businesses: