Sanlam and Europe’s largest insurer, Allianz, have agreed to combine their operations across Africa in a joint venture that will house the business units of both companies in the African countries where one or both companies have a presence, the financial services groups said in a statement.
South Africa is excluded from the agreement, and Sanlam’s operations in Namibia will be included at a later stage.
The newly incorporated joint venture company (JVCo) will create a pan-African non-banking financial services entity with a total group equity value of more than R33 billion that will operate in 29 countries.
The companies have agreed to remain invested in JVCo for at least 10 years.
Sanlam, through its wholly owned subsidiary Sanlam Emerging Markets (SEM) and its associated entities, has life and general insurance and investment management operations in more than 30 countries.
Allianz’s insurance portfolio includes 11 African countries, but not South Africa.
The partnership aims to increase life and general insurance penetration, accelerate product innovation and drive financial inclusion in high-growth African markets.
“In line with Sanlam’s stated ambition to be a leading pan-African financial services group, the proposed joint venture will enable us to take a significant step towards realising that ambition. It will also strengthen our leadership position in multiple key markets that are core to our Africa strategy, building quality and scale where it matters,” said Sanlam group chief executive Paul Hanratty.
The initial shareholding split of Sanlam and Allianz in JVCo will be 60:40 respectively, with the ability for Allianz to increase its shareholding to a maximum of 49% over time.
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.
Sanlam’s operations in India, the Middle East and Malaysia will not be contributed to 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.
The SEM cluster contributed 23.5% (R2.2bn) to Sanlam’s R9.47bn net result from financial services in its year to the end of December.
The chairmanship of the joint venture partnership will rotate every two years between Sanlam and Allianz, according to both companies, while a chief executive of the entity will be named in due course.
The agreement is subject to certain conditions, including approvals from the competition and financial/insurance regulatory authorities and any customary conditions that Sanlam and/or Allianz would be required to fulfil for each jurisdiction.
