Sanlam and Santam set sights on North Africa

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Sanlam and Santam have reached an agreement to acquire a 30 per cent stake in Morocco-based Saham Finances which operates in a total of 26 countries predominantly across Africa and with a presence in the Middle East.

The group announced that it had concluded agreements to jointly acquire the stake in Morocco-based Saham Group’s insurance business for a purchase consideration of $ 375 million.

Sanlam and Santam will acquire 30 per cent of the share capital of Saham Finances from the Abraaj Group (Abraaj) and the International Finance Corporation (IFC), which is a member of the World Bank Group, and the IFC African Latin American and Caribbean Fund (IFC ALAC Fund), which is managed by IFC Asset Management Company. The Saham Group already holds the majority 62.5 per cent shareholding in Saham Finances.

The transaction is still subject to regulatory approvals and the acquisition by the Saham Group of the remaining stake (7.5 per cent) held by Abraaj, IFC and the IFC ALAC Fund in Saham Finances. On completion of the transaction, Sanlam Emerging Markets (SEM) will hold 75 per cent and Santam 25 per cent of the stake through a special purpose vehicle.

The transaction is set to expand the Sanlam Group’s footprint across the African continent with entry into new attractive markets. These include, among others, Cote d’Ivoire, Gabon, Senegal and Cameroon in Francophone West Africa; the Arabic-speaking North African country of Morocco and Lebanon in the Middle East; and Angola in Lusophone Southern Africa.

Saham Finances, one of the largest insurers in Africa, is the market leader in most of the 26 countries in which it operates, writing mostly non-life business. It has a network of over 650 branches, a staff complement of more than 3000 people and a consolidated turnover of over $1 billion.

It is the largest insurance group in Africa outside of South Africa and has seen steady growth particularly in Africa because of its ambitious and deliberate acquisition strategy. To this end, the company has recently made several acquisitions in Nigeria, Kenya, Rwanda and Angola, among others.

The company, which operates mainly in the insurance, assistance and health administration sectors, has an extensive presence in Africa and the Middle East. It offers a unique and complete service, responding to the expectations of private individuals, professionals and companies.

“We believe that Africa presents us with a unique, long-term growth opportunity. This partnership with Saham Finances will provide the Sanlam Group with a significant competitive advantage as no other insurance company can offer the same regional network to the professional and corporate market. This transaction, which is aligned to our diversification strategy, will enable us to access a diversified blend of new high-growth insurance markets in North and West Africa, which are largely underpenetrated,” Sanlam Group’s chief executive, Ian Kirk, says.

“We are confident that the continent’s growing population, improved political landscape and the evolving financial markets and regulatory environment support our vision of being a leading Pan-African financial services company.”

“Saham Finances will strengthen its development through a partnership with Sanlam, a leading South African financial services group. Our partnership with Sanlam is an important step to expand our mutual geographical presence, ensuring a unique African footprint. Our aim is to combine our know-how to capture the expected strong growth opportunities. This partnership clearly makes Saham Finances and Sanlam the leading insurance groups across Africa,” Saham Finances managing director, Raymond Farhat commented.

Sanlam and Santam expect the transaction to be completed in the first quarter of 2016.