Sanlam has offered to buy up to 100% of the issued ordinary shares of Assupol Holdings, a South African insurance company.
The proposed acquisition is expected to take place via a scheme of arrangement, with a fallback general offer to shareholders of Assupol.
Valued at approximately R6.5bn ($343.59m), the acquisition is projected to strengthen Sanlam’s position in the South African financial services sector.
The proposed deal will integrate Assupol into Sanlam’s retail mass cluster including Sanlam Sky, Safrican, and the upcoming Capitec joint venture, which is set to conclude by October this year.
Sanlam’s retail mass cluster CEO Bongani Madikiza will be responsible for ensuring Assupol’s integration into the Sanlam Group.
Madikiza will manage the coordination of different retail mass businesses within the group, while ensuring that the integrated intellectual property, best practice and work is in line with Sanlam’s strategy to grow in the market.
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The deal awaits regulatory clearances.
If materialised, it will allow Assupol to retain its own brand as well as separate leadership team.
Sanlam Group CEO Paul Hanratty said: “The proposed acquisition will allow us to strengthen our fortress South Africa strategy and signifies Sanlam’s commitment to further long-term investment in South Africa.
“It places Sanlam in a strong competitive position in the retail mass segment of the South African market, thereby embedding our commitment to South Africa.”
Set up in 1913, Assupol has evolved from a burial society for South African Police Service members into a life insurer.
The company registered gross insurance premium revenue surpassing R5bn, a solvency cover ratio of 179% and embedded value of more than R7bn for the financial year ended 30 June 2023.
Assupol chairman Dr Reuel Khoza added: “We believe this acquisition by Sanlam will bring even greater opportunities for growth and success. It will not only strengthen our position in the market but also enhance our ability to provide exceptional value to our clients.”