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Proposed Disposal Of Sanlam’s Operations In Large Stand-Alone Retirement Fund Administration
Sanlam Limited
(Incorporated in the Republic of South Africa)
Registration number 1959/001562/06
JSE share code: SLM
A2X share code: SLM
NSX share code: SLA
ISIN: ZAE000070660
(“Sanlam”)
PROPOSED DISPOSAL OF SANLAM’S OPERATIONS IN LARGE STAND-ALONE
RETIREMENT FUND ADMINISTRATION
1. INTRODUCTION
The board of directors of Sanlam is pleased to announce the conclusion of a sale and transfer of
business agreement with Alexander Forbes Group Holdings Limited (“Alexander Forbes”) which
will result in Sanlam Life Insurance Limited, (“Sanlam Life”), disposing of its operations in relation
to large stand-alone retirement fund administration (the “EB Stand-alone Administration
Business”) to Alexander Forbes as a going concern (the “Proposed Transaction”).
Alexander Forbes is an associate of African Rainbow Capital Financial Services Proprietary
Limited, a wholly-owned subsidiary of Ubuntu-Botho Investments Proprietary Limited (“UBI”). For
purposes of the Listings Requirements of the JSE Limited (“JSE”), UBI is a material shareholder
in Sanlam.
The Proposed Transaction is therefore deemed a small related party transaction in terms of the
Listings Requirements of the JSE following the aggregation of transactions entered into over the
past 12 months between Sanlam and entities related to UBI. These transactions include the
acquisition of African Rainbow Life and the acquisition of the group risk and retail life businesses
of Alexander Forbes Life Limited by Sanlam Life.
2. RATIONALE FOR THE TRANSACTION
Sanlam has made the strategic decision to dispose of its operations in relation to large stand-
alone retirement fund administration in order to focus on areas it considers key to its future
positioning. These areas include umbrella fund administration, group risk underwriting,
investment management, life investments, consulting services and health solutions.
CONFIDENTIAL
3. OVERVIEW OF THE TRANSACTION
3.1. STRUCTURE AND PRICING
The EB Stand-alone Administration Business consists of Sanlam’s commercial interests in 44
contracts to provide stand-alone administration services (including ancillary services) to
retirement funds. The Proposed Transaction entails the transfer of the administration contracts,
know-how and the employees relevant to the administration of the retirement funds.
As per Sanlam’s latest reviewed interim financial statements for the six-month period ended 30
June 2021 (prepared in terms of IFRS), the aggregated net asset value of the EB Stand-alone
Administration Business was Rnil and the aggregated net profit after tax for the period attributable
to the net assets was R18.4million.
The Proposed Transaction will be settled in cash by Alexander Forbes for a purchase
consideration of R154 million; payable between the closing date of the Proposed Transaction and
the 2nd anniversary of the closing date, contingent on the successful transfer of clients to
Alexander Forbes.
3.2. USE OF PROCEEDS
The cash proceeds will be retained as discretionary capital.
3.3. CONDITIONS TO AND KEY TERMS OF THE PROPOSED TRANSACTION
The Proposed Transaction is subject to certain suspensive conditions, including but not limited to
the relevant approvals from the competition authorities and other regulatory authorities, obtaining
board of trustee approvals from the relevant transferring retirement funds and the entry into a
transitional services agreement to allow for a smooth migration of the retirement funds to
Alexander Forbes.
The definitive transaction agreements to give effect to the Proposed Transaction contain
warranties and indemnities customary for transactions of this nature.
3.4. INDEPENDENT FAIRNESS OPINION
As indicated in paragraph 1 above, the Proposed Transaction is categorised as a small related
party transaction in terms of paragraph 10.7 of the Listings Requirements of the JSE.
Accordingly, the Sanlam Board is required to provide the JSE with written confirmation from an
independent professional expert confirming that the terms of the Proposed Transaction are fair
insofar as Sanlam shareholders are concerned (the “Fairness Opinion”).
CONFIDENTIAL
The Sanlam Board appointed Deloitte & Touche (South Africa) (“Deloitte”) as independent
professional expert to provide it with the Fairness Opinion.
Deloitte has furnished an opinion to the Sanlam Board confirming that the terms of the Proposed
Transaction are fair insofar as Sanlam shareholders are concerned. This opinion has been
provided to the JSE.
Once approved by the JSE, the Fairness Opinion of Deloitte will be made available for inspection
at Sanlam’s registered office, 2 Strand Road, Bellville Cape Town, 7530, for a period of 28 days
from the date of release of this announcement. It will also be made available during this period on
request from Sanlam’s Company Secretary at Sana-Ullah.Bray@sanlam.co.za.
4. EFFECTIVE DATE
The effective date of the Proposed Transaction will be dependent on the fulfilment of the
suspensive conditions to the Proposed Transaction and is expected to occur during the second
half of 2022.
Bellville
6 December 2021
Enquiries
Sanlam Investor Relations
Phone: +27 21 947 8455
E-mail: ir@sanlam.co.za
Sponsor to Sanlam
The Standard Bank of South Africa Limited
Legal Advisers to Sanlam
Glyn Marais Incorporated
Nortons Inc
Independent Professional Expert
Deloitte & Touche (South Africa)
Date: 06-12-2021 07:32:00
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