South African insurance giant Sanlam is picking another 22.8% interest in Morocco’s Saham Assurance Maroc in a deal worth $137.1m (MAD1.2bn).

The deal sees Sanlam subsidiary SAN JV (RF) Proprietary (SAN JV) raise its direct and indirect stake in the Moroccan property and casualty insurer.

SAN JV will buy the shares from Moroccan business tycoon Said Alj and two of his associated entities – Sanam Holdings and First Commercial Estate Company.

The transaction will raise SAN JV raise its holding in Saham to 84.5%.

The deal, which awaits regulatory clearance in South Africa and Morocco, will be financed utilising Sanlam’s debt facilities.

Furthermore, the sellers will reinvest 50% of the proceeds to purchase shares in Sanlam on the open market. These shares will be bought over the next few months and held for at least two years.

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Sanlam anticipates various benefits through the deal, one of them being able to strengthen its direct presence in North and Francophone West Africa.

The firm also believes that the deal will help it explore broad partnerships in the long-term and drive growth in the region.

Santam, which is the co-investor with Sanlam in the SAN JV, will confirm the extent of its participation after a board meeting scheduled in September. However, the deal is not subject to the decision, noted Sanlam.

SAHAM, listed on the Casablanca Stock Exchange since 2010, is 61.7% owned by SAN JV.

Sanlam’s in-country partner has been Sanam Holdings – a Moroccan investment firm owned by Alj.

The insurer said that Sanam will continue to offer it strategic, economic and commercial advice on Moroccan activities.

SEM CEO Heinie Werth said: “This transaction further enhances our long-standing commitment to the Moroccan market.”

Werth added” “Morocco and the broader North and West Africa regions remain key markets for Sanlam and this proposed transaction is in line with our African diversity strategy.”

In December 2020, Sanlam took a 25% stake in African Rainbow Capital Financial Services’ new subsidiary for $50m.

Earlier last year, Sanlam acquired the remaining stake in the Nigerian insurance business FBN Insurance from its partner, FBN Holdings.

The acquisition offers the company full ownership of FBN Insurance (FBNI) and its subsidiary FBN General Insurance.