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:
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:
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.
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.
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.
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.
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.
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.
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.
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