Wrap Text
Sanlam Ltd/Santam Ltd - Acquisition of an effective 30% interest in Saham Finances S.A
Sanlam Limited Santam Limited
(Incorporated in the Republic of South Africa) (Incorporated in the Republic of South Africa)
Registration number 1959/001562/06 Registration number: 1918/001680/06
JSE share code: SLM JSE share code: SNT
NSX share code: SLA NSX share code: SNM
ISIN: ZAE000070660 ISIN: ZAE000093779
(“Sanlam”) ("Santam")
ACQUISITION OF AN EFFECTIVE 30% INTEREST IN SAHAM FINANCES S.A. (“Saham Finances”)
1. INTRODUCTION
The boards of directors of Sanlam and Santam are pleased to announce the conclusion of agreements,
whereby Sanlam’s wholly owned subsidiary, Sanlam Emerging Markets Proprietary Limited (“SEM”), and
Santam will jointly acquire an effective 30% interest in Saham Finances, the insurance arm of the Saham
Group, from The Abraaj Group (“Abraaj”), the International Finance Corporation ,a member of the World
Bank Group, (“IFC”), and the IFC African Latin American and Caribbean Fund which is managed by IFC
Asset Management Company (“IFC ALAC Fund”), through a special purpose vehicle (“Acquisition
SPV”) held jointly by SEM as to 75% and Santam as to 25%, for a total cash consideration of US$ 375
million (“Purchase Consideration”) (the “Transaction”).
2. OVERVIEW OF SAHAM FINANCES
Saham Finances is an insurance group with operations in 26 countries across North, West and East
Africa, and the Middle East. It is the largest insurer in Africa excluding South Africa. It writes mainly
(exceeding 80%) non-life business through its 49 subsidiaries, and has a network of 650 branches with a
staff complement of more than 3,000 people. Saham Finances also has a leading market share in many of
its markets.
The principal insurance businesses of Saham Finances in the various regions include:
2.1. Morocco
- Saham Assurance Maroc, the leading property and casualty insurer, is 51.8% owned by Saham
Finances. Saham Assurance has been listed on the Casablanca Stock Exchange since 2010.
- Saham Assistance is the leading provider of roadside and travel assistance in Morocco and
West Africa and is 67% owned by Saham Finances and 25% owned by Saham Assurance
Maroc.
2.2. Sub-Saharan Africa
- Colina Participations is the holding company of the Saham Finances subsidiaries in West and
Central Africa, and is based in Cote d’Ivoire. It is the leading insurance group in Africa’s
Francophone region, with 28 life and non-life subsidiaries operating across 14 countries
including the Cote d’Ivoire, Gabon, Cameroon and Mali. Colina Participations is a wholly owned
subsidiary of Saham Finances.
2.3. Lebanon
- LIA Insurance is a composite insurance company with a strong presence in motor and life
insurance. 81% of the share capital of LIA Insurance is held by Saham Finances.
2.4. Angola
- GA Angola Seguros S.A. is a non-life insurer in Angola. It is the third largest player in the
Angolan insurance market with an 18% share of a rapidly growing market. Colina Participations
holds a 49.9% shareholding in GA Angola Seguros S.A.
3. RATIONALE FOR THE TRANSACTION
The Transaction provides the Sanlam Group (which includes Santam) with the opportunity of a single entry
point to expand in both North and West Africa.
The markets in both North and West Africa represent an attractive strategic opportunity for the Sanlam
Group as it:
- enhances the Sanlam Group’s African franchise with strong franchises in Francophone,
Anglophone and Lusophone Africa
- provides the Sanlam Group with access to untapped insurance growth markets in both North and
West Africa. These markets are both characterised by fast growing economies and
underpenetrated insurance markets
- provides opportunities for the expansion of the Sanlam Group’s current Pan-African bancassurance
relationships into new African territories
- provides the Sanlam Group with a well-diversified portfolio which is largely complementary to its
existing geographical footprint, thereby expanding the Pan-African exposure of the Sanlam Group.
The Sanlam Group, Saham Finances and the Saham Group shall also continue to explore future co-
operation opportunities to strengthen the strategic and operational relationship going forward.
4. PURCHASE CONSIDERATION
The Purchase Consideration for the assets to be acquired by the Acquisition SPV will be apportioned on
the basis of 75% payable by SEM and 25% payable by Santam. Each of SEM and Santam will fund their
proportionate share of the Purchase Consideration from available internal capital resources.
4.1. SEM
SEM will be appropriately capitalised by Sanlam from its available discretionary capital.
4.2 Santam
Santam will fund its proportionate share of the purchase consideration of US$ 93.76 million from the
net proceeds on disposal of a portion of its listed equity portfolio, and from existing foreign cash
resources.
5. CONDITIONS PRECEDENT TO THE TRANSACTION
The conclusion and implementation of the Transaction will remain subject to the completion of conditions
precedent which are, inter alia, the receipt of all necessary regulatory approvals, and the concurrent
acquisition by the Saham Group of the remaining 7.5% interest in Saham Finances held by the IFC, IFC
ALAC Fund and Abraaj.
6. OTHER KEY TERMS
In terms of the shareholders agreement to be concluded between the Acquisition SPV, Sanlam and the
Saham Group, Sanlam and Santam will (jointly) have representation on the board of Saham Finances and
certain key subsidiaries and certain minority protections.
Sanlam has also undertaken to procure that the Acquisition SPV will comply with its obligations under the
relevant transaction agreements.
7. FINANCIAL EFFECTS OF THE TRANSACTION
As per the latest audited financial statements for the year ended 31 December 2014, the consolidated net
asset value of Saham Finances on 31 December 2014 was US$ 459 million and the net profit after tax and
minority interests for the period was US$ 52 million.
Post the implementation of the Transaction, the Acquisition SPV will participate in 30% of the earnings and
net asset value of Saham Finances.
Sanlam and Santam will account for their respective effective interests in Saham Finances as investments
in associated companies in their consolidated financial statements.
8. EFFECTIVE DATE
The effective date of the Transaction will be dependent on the fulfilment of the conditions precedent and is
expected to occur during the first quarter of 2016.
9. JSE LIMITED LISTINGS REQUIREMENTS
For Santam, the Transaction has been categorised as a Category 2 transaction in terms of the Listings
Requirements of the JSE Limited.
For Sanlam, the Transaction is below the Category 2 threshold and this announcement is made on a
voluntary basis.
10. CONFERENCE CALL
A joint Sanlam and Santam conference call for analysts, investors and the media will take place at 16h00
(South African time) today. Investors and media who wish to participate in the conference call should dial
the numbers indicated below.
Audio dial-in facility
A toll free dial-in facility will be available. We kindly advise callers to dial in 5 to 10 minutes before the
conference call starts at 16h00.
Access numbers for participants dialing live from their country:
South Africa Toll 021 819 0900
Toll-free 0800 200 648
USA and Canada Toll-free 1 855 481 5362
UK Toll-free 0 808 162 4061
Other Countries Toll +27 11 535 3600
+27 10 201 6800
Recorded playback will be available for three days after the conference call.
Access Numbers for Recorded Playback:
Access code for recorded playback: 43057
South Africa Toll 011 305 2030
USA and Canada Toll-free 1 855 481 5363
UK Toll-free 0 808 234 6771
Other Countries Toll +27 11 305 2030
Bellville
24 November 2015
Sponsor to Sanlam Sponsor to Santam
Deutsche Securities (SA) Proprietary Limited Investec Bank Limited
Date: 24/11/2015 09:00:00 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.