Marsh unit to buy 34% of Alex Forbes

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Johannesburg - Alexander Forbes, Africa’s largest independent pension-fund manager, said a unit of Marsh & McLennan will buy a 34 percent stake as the South African company prepares to sell shares on the Johannesburg Stock Exchange.

Mercer Africa, a wholly-owned subsidiary of New York-based Marsh, the biggest insurance broker by market value, will buy 14.9 percent of Alex Forbes at the time of listing and a further 19.1 percent after regulatory approvals, the Johannesburg-based company said today in an e-mailed statement.

The stake is valued at about 4.19 billion rand, according to data compiled by Bloomberg.

“Mercer is making this investment to gain exposure to growth prospects in South Africa and the broader sub-Saharan Africa markets,” Alex Forbes said.

Shareholders in Alex Forbes met June 20 to decide whether to sell shares on the bourse or sell the company to a trade buyer as private equity owners prepare to exit.

The company received interest from Marsh & McLennan, three people familiar with the talks told Bloomberg News last week.

Alex Forbes was delisted and bought out by companies including Actis and Ethos Private Equity for 8.2 billion rand in 2007.

Deutsche Bank and Rand Merchant Bank were hired last year as financial advisers.

The company plans to sell shares on the JSE by the end of July, chief executive Edward Kieswetter said in an interview last week.

Kieswetter, who became chief executive in 2010, has overseen the sale of three UK operations and South African insurance unit Guardrisk while returning the company to profitability. - Bloomberg News

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