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BISLI: Creation of a Pan-African Joint Venture between SANLAM and ALLIANZ SE and withdrawal of Cautionary
Sanlam Life Insurance Limited
(Incorporated in the Republic of South Africa)
(Registration No. 1998/021121/06)
Bond Issuer Code: BISLI
ANNOUNCEMENT RELATING TO THE CREATION OF A PAN-AFRICAN JOINT VENTURE BETWEEN SANLAM AND ALLIANZ SE
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcements dated 22 December 2021, 03 February 2022 and 18 March 2022, in
which it was advised that Sanlam Limited (“Sanlam”) and Allianz SE (“Allianz”), a global integrated financial services group with
its holding company listed on the Frankfurt Stock Exchange, were exploring various strategic alternatives in relation to their
respective African business units (excluding South Africa). Shareholders are advised that the parties and certain of their associated
entities have entered into definitive agreements in respect of a long-term strategic joint venture (the “Joint Venture ” or “JV”)
arrangement regarding their operations on the African continent, outside of South Africa. Sanlam and Allianz w ill contribute their
respective African operations into a newly incorporated joint venture company (“JVCo”), creating a leading Pan-African financial
services group with an extensive footprint across the African continent (the “Proposed Transaction”). In line with both parties’
long-term commitment to the strategic partnership and the continent, the parties have agreed to remain invested in the JV for a
period of at least 10 years.
Sanlam, through its wholly owned subsidiary Sanlam Emerging Markets Proprietary Limited (“SEM”) and its associated entities
currently have life and general insurance, as well as investment management operations in more than 30 countries, including
Morocco, Ivory Coast, Nigeria and Botswana, while Allianz’s insurance portfolio spans 11 countries, excluding South Africa,
including operations in Egypt, Kenya, Cameroon and Uganda.
2. BACKGROUND TO ALLIANZ
Allianz is a global integrated financial services group operating in the insurance and asset management sectors. Serving over 126
million customers in more than 70 countries globally and employing more than 155,000 employees worldwide. Allianz has more
than 100 years of heritage in Africa, with presence since 1912 and a strong presence in key African countries such as Egypt,
Kenya, Cameroon and Uganda, with an insurance portfolio spanning 11 countries, excluding South Africa, serving approximately
2 million customers, with its approximately 2,600 employees. Allianz prides itself in delivering leading international insurance
programs across Africa and is committed to building Pan-African leadership in all relevant markets.
3. RATIONALE FOR THE PROPOSED TRANSACTION
In line with Sanlam’s stated strategy to become a leading Pan-African financial services group by driving operational excellence in
core markets and selective expansion into high priority countries, the Proposed Transaction will enable Sanlam to enhance its
capabilities in existing markets and expand its footprint and market leading positions in certain key jurisdictions on the African
continent. In addition, Sanlam sees a number of strategic benefits in entering into the Proposed Transaction, which include:
- enabling a strategic partnership with one of the largest financial services groups and insurers in the world, leveraging
Allianz’s broad expertise and capabilities;
- accelerating Sanlam’s expansion into high priority countries, further strengthening Sanlam’s position in markets core to
Sanlam’s African strategy and optimizing the existing Pan-African portfolio;
- developing Sanlam’s innovative existing strategic partnerships and enhancing Sanlam’s digitally enabled distribution
network across a best in class product offering;
- maintaining disciplined capital allocation, maximizing value creation for both Sanlam and Allianz and their respective
stakeholders; and
- jointly with Allianz, benefiting from know ledge sharing, economies of scale, a combined platform as w ell as potential
synergies for JVCo and Sanlam.
4. OVERVIEW OF THE PROPOSED TRANSACTION
4.1 STRUCTURE
Sanlam will hold the controlling interest in the JVCo, with Allianz holding a significant minority shareholding with
commensurate governance rights and minority protections. The initial shareholding split of Sanlam and Allianz in the
JVCo, will be 60:40 respectively, with the ability for Allianz to increase its shareholding to a maximum of 49% over time.
The proposed structure envisages the below transaction steps, subject to various conditions precedent, as outlined in
paragraph 4.3 below.
SEM and its associated entities will contribute their African assets (excluding South Africa, Continental Re and SEM's
Namibian subsidiaries but including its 90% shareholding in SAN JV (RF) Proprietary Limited ("San JV"), for a 60%
shareholding in JVCo.
Allianz will contribute all its African assets (including its minority stake in African Reinsurance Corporation and its
shareholding in Jubilee’s general insurance businesses in Kenya, Uganda and Burundi).
As per the cautionary announcements published by Santam Limited (“Santam”), last renewed on the 18 March 2022,
Allianz is currently in discussions with Santam to acquire its 10% shareholding in SAN JV and, to the extent that that
transaction is concluded and implemented, Allianz will also contribute its 10% shareholding in San JV to JVCo. Allianz's
contributions will be exchanged for a 40% shareholding in the JVCo.
Sanlam’s operations in Namibia will be contributed to JVCo at a later stage, and at a time when Allianz will also have the
option to increase their shareholding in the JVCo to 49%.
Sanlam’s operations in India, the Middle East and Malaysia will not be contributed to JVCo.
4.2 FINANCIAL INFORMATION
The parties will contribute their respective assets based on Appraisal Value (“AV”), which is determined based on the
various businesses’ contribution to Group Equity Value (“GEV”) plus the value of future new business, as at 30 June 2021.
The initial shareholding split of Sanlam and Allianz in the JVCo, will be 60:40 respectively, determined based on relative
AV.
The total GEV of the contemplated JVCo assets are expected to be in excess of €2 billion / ZAR33 billion(1), with the JVCo
combined attributable net income associated with these contemplated assets in excess of €25 million / ZAR420 million(1)
as at 30 June 2021 (net income for the first six months) of which Sanlam’s attributable net income is in excess of €15
million / ZAR254 million(1).
As per Sanlam’s accounts as at 30 June 2021 (prepared in terms of IFRS), the aggregated net asset value of Sanlam’s
contemplated contributed assets was €1.3 billion / ZAR 22 billion(1).
(1)Assumed EUR/ZAR exchange rate of 16.93 as at 30 June 2021
4.3 CONDITIONS PRECEDENT
The Proposed Transaction is subject to certain suspensive conditions, including but not limited to the relevant approvals
from the competition authorities, regulatory authorities, and any customary conditions that are required to be satisfied by
Sanlam and Allianz respectively for each jurisdiction.
4.4 WARRANTIES AND INDEMNITIES
The definitive transaction agreements to give effect to the Proposed Transaction contain warranties and indemnities
customary for transactions of this nature.
4.5 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 within 12-15 months of this announcement.
5 CATEGORISATION OF THE PROPOSED TRANSACTION
The Proposed Transaction constitutes a Category 2 transaction for Sanlam in terms of Section 9 of the JSE Limited Listings
Requirements and accordingly no Sanlam shareholder approval is required.
6 INVESTOR AND ANALYST CONFERENCE CALL
A conference call for analysts and investors w ill take place at 16h00 (South African time) today, 4 May 2022. Investors and
analysts who wish to participate in the conference call should register as indicated below.
Audio dial-in facility
A dial-in facility will be available. Those wishing to participate in the conference call should register by navigating to
https://w ww.diamondpass.net/2768645
Registered participants will receive their dial-in number upon registration. For assistance, please contact Sanlam Investor Relations
at +2721 947 8455.
Recorded playback will be available until 9 May 2022.
Access Numbers for Recorded Playback:
Access code for recorded playback: 42225
South Africa 010 500 4108
USA and Canada 1 412 317 0088
UK 0 203 608 8021
Other Countries +27 10 500 4108
For further information on Sanlam, please visit our website at www.sanlam.com
7 WITHDRAWAL OF CAUTIONARY ANNOUNCEMNT
Shareholders are further advised that, following the release of this announcement, caution is no longer required to be exercised by
shareholders when dealing in the Company’s securities.
Bellville
4 May 2022
Debt sponsor
Absa Bank Limited, acting through its Corporate and Investment Banking division
Enquiries
Sanlam Investor Relations Phone: +27 21 947 8455
Email : ir@sanlam.co.za
Financial adviser and Transaction Sponsor to Sanlam
J.P. Morgan
Lead Legal adviser to Sanlam
Webber Wentzel
English Law Legal adviser to Sanlam
Allen & Overy
FORWARD LOOKING STATEMENTS
In this announcement w e make certain statements that are not historical facts and relate to analyses and other information based on
estimates and/or forecasts of future results not yet determinable, relating, amongst others, to new business volumes, investment returns
(including exchange rate fluctuations), solvency ratios, GEV and actuarial assumptions. These statements may also relate to our future
prospects, developments and business strategies. These are forward-looking statements as defined in the United States Private
Securities Litigation Reform Act of 1995. Words such as “believe”, “anticipate”, “intend”, “seek”, “w ill”, “plan”, “could”, “ may”, “endeavor”
and “project” and similar expressions are intended to identify such forward-looking statements but are not the exclusive means of
identifying such statements. Forward-looking statements involve inherent risks and uncertainties and, if one or more of these risks
materialise, or should underlying assumptions prove incorrect, actual results may be very different from those anticipated. Forward-
looking statements apply only as of the date on which they are made, and Sanlam does not undertake any obligation to update or revise
any of them, whether as a result of new information, future events or otherwise. Any forward-looking information contained in this
announcement has not been reviewed and reported on by Sanlam’s external auditors.
Date: 04-05-2022 07:10:00
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