SANTAM: 28,712 -645 (-2.20%)
Sanlam buys out Morocco's SAHAM Finances in $1 bln African expansion
(Adds detail, background, analyst quote)
By Nqobile Dludla and Zakia Abdennebi
JOHANNESBURG/RABAT, March 8 (Reuters) - South Africa's
biggest insurer Sanlam Ltd said on Thursday it will buy
the rest of Moroccan insurer SAHAM Finances for $1
billion, as part of its plan to become a Pan-African insurance
The deal will give Sanlam, valued at more than $16 billion,
access to SAHAM's fast-growing African business in 26 countries
through 65 subsidiaries across the continent.
SAHAM has been following the trail of Moroccan banks which
have been moving to sub-Saharan countries, part of the kingdom's
strategy to grow its influence in Africa.
SAHAM Finances is owned by Groupe SAHAM, founded in 1995 by
Moroccan tycoon Moulay Hafid Elalamy who is also the country's
trade and industry minister. Morocco returned a year ago to the
African Union with King Mohammed VI spearheading investment and
The deal underscores the attractiveness of firms on the
Casablanca bourse where SAHAM is listed, which the government
has been promoting as a pan-African trade hub. However, deals of
this size are rare on the bourse.
"With its thorough African expertise and its strong
commitment to address large-scale projects, SAHAM group will
transform into a Pan-African investment fund, with the ambition
of strengthening its position as a strategic continental
economic player," SAHAM said in a statement.
Under the deal, Sanlam Emerging Markets Ireland Ltd (SEMIL),
a unit in a joint-venture with South African insurer Santam Ltd
would buy all shares of SAHAM, which currently holds
the stake in SAHAM Finances not already owned by SEMIL, the
firms said in a statement.
SEMIL, an investment vehicle, first bought a 30 percent
stake in SAHAM Finances in February 2016 and bought 16.63
percent more in May 2017.
"It's a good deal for Sanlam. It certainly gives them a very
strong position in Africa, there is no one that is able to
compete with their footprint now," said an analyst who did not
want to be named.
"They will be free to do a lot more that they'll like to do
in terms of unlocking value or see how they can structure the
business better than what it was previously."
SEMIL is a unit of SAN JV Proprietary Ltd, a special purpose
vehicle owned by Sanlam's emerging markets unit and Santam
The deal will be funded with a combination of available
capital, debt facilities and the issuance of equity instruments,
Sanlam and Santam said in a joint statement.
Under the deal SAHAM will also buy out shares in French
group Wendel, it said, without giving details.
Sanlam separately reported a 1.4 percent drop in full-year
profit, hurt by recession in its home market.
Sanlam's stock was down 0.16 pct to 94.84 rand while Santam
is up 1.27 percent to 325.09 rand. SAHAM's stock was suspended
on the Casablanca bourse.
(Reporting by Arathy S Nair in Bengaluru, Zakia Abdennebi in
Rabat, Ulf Laessing in Tunis and Nqobile Dludla in Johannesburg
Writing by Ulf Laessing
Editing by Gopakumar Warrier and Alexander Smith)
© 2018 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.