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AFP - Alexander Forbes - Announcement regarding the transaction between Alexander Forbes Limited and Marsh Proprietary Limited Alexander Forbes Preference Share Investments Limited (Incorporated in the Republic of South Africa) Share code: AFP ISIN: ZAE000098067 ("AF Pref") Announcement regarding the transaction between Alexander Forbes Limited and Marsh Proprietary Limited 1. Introduction AF Pref linked unitholders ("Linked Unitholders") are referred to the terms announcement released on the Securities Exchange News Service ("SENS") on 31 August 2011 and published in the press on 1 September 2011 ("the Terms Announcement") regarding the conclusion of an agreement in terms of which Alexander Forbes Limited ("Alexander Forbes") would
* merge its Corporate and Commercial broking business, Alexander Forbes Risk Services Proprietary Limited ("AFRS") with Marsh Proprietary Limited ("Marsh SA"), with Marsh SA being the surviving company after implementation of the merger; and * dispose of its interests in Alexander Forbes iConnect Proprietary Limited ("iConnect"), Alexander Forbes Compensation Technologies Administration Proprietary Limited ("AFCT Admin") and the sub-Saharan insurance broking investments of Alexander Forbes AfriNet Investments Proprietary Limited ("AfriNet Risk Services") in Botswana and Namibia to companies within the Marsh Inc. ("Marsh") group of companies ("Marsh Group"), ("the Proposed Transaction"). Salient terms and conditions of the Proposed Transaction were set out in the Terms Announcement. Linked Unitholders were informed that the Proposed Transaction would be implemented in phases and that the first phase would pertain to the Marsh Group acquiring Alexander Forbes` interests in South Africa, Namibia and Botswana (comprising AFRS, iConnect, AFCT Admin and AfriNet Risk Services (collectively "AF Risk Services Africa")) (the "First Closing"). Linked Unitholders are now informed that all conditions precedent pertaining to the First Closing were fulfilled today, with effect from 1 January 2012. 2. Update on the Subsequent Closing As outlined in the Terms Announcement, MMC UK Group Limited ("MMC UK") may, subject to inter alia the conditions precedent set out in the Terms Announcement, satisfactory completion of due diligence by Marsh and the obtaining of the requisite shareholder and regulatory approvals, purchase from the relevant company within Alexander Forbes the share capital and loan account (if any) of certain local operations of AfriNet Risk Services across sub-Saharan Africa (the "Subsequent Closing"). MMC UK have now advised that the Marsh Group companies will acquire interests in Alexander Forbes` Risk Services operations in Malawi, Mozambique, Nigeria, Uganda and Zambia (the "Subsequent Sales"). Each of the Subsequent Sales individually is subject, inter alia, to the fulfilment or waiver (where applicable) of the following material Conditions Precedent insofar as is relevant to that Subsequent Sale: 2.1 the implementation and completion of the First Closing; 2.2. all applicable regulatory and statutory approvals having been granted; and 2.3. other conditions typical in a transaction of this nature. Linked Unitholders will be informed by way of an announcement on SENS should any of the Subsequent Sales not take place. 3. Proposed Transaction consideration The consideration payable by the various subsidiaries of Marsh to Alexander Forbes in respect of the Proposed Transaction is R780.6 million (the "Initial Consideration"). The Proposed Transaction consideration (the "Consideration") may, subject to certain conditions and the achievement of specified revenue, operational and strategic performance targets, increase by up to R300.6 million payable in tranches up to 24 months from the First Closing (the "Deferred Consideration"). Therefore, the maximum Consideration is R1,081.2 million. Other salient terms of the Proposed Transaction remain as set out in the Terms Announcement. 3 January 2012 Sandton Financial Adviser to Alexander Forbes and AF Pref and Transaction Sponsor to AF Pref DEUTSCHE SECURITIES (SA) (PROPRIETARY) LIMITED Legal Adviser to Alexander Forbes Edward Nathan Sonnenbergs Inc Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Adviser to Marsh Merrill Lynch SA (PTY) Limited (a subsidiary of Bank of America Corporation) Legal Adviser to Marsh Bowman Gilfillan Date: 04/01/2012 08:05:21 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
