Santam offices. File Image: IOL
JOHANNESBURG - Financial services group Sanlam yesterday announced that a subsidiary of its joint venture with insurer Santam would buy the remaining 53.37percent stake in insurance company Saham Finances for $1.05billion (R12.44bn).

Saham has operations in 26 countries across north, west and east Africa, as well as the Middle East. It has 65 subsidiaries, a network of 700 branches and a staff complement of more than 3000 people, Sanlam said.

The transaction enables Sanlam to entrench its direct presence in north Africa, Francophone west Africa and Portuguese-speaking Southern African countries.

“The acquisition of 100percent of Saham Finances enables Sanlam to have a meaningful presence across sub-Saharan and North Africa, and is a natural extension of Sanlam’s stated strategy. Saham Finances’ overall performance has been in line with the original business case which was put forward when the initial acquisition of a 30percent interest in Saham Finances was considered, and the Saham Finances’ management teams are working well with the Sanlam and Santam support teams.

"The transaction increases Sanlam’s exposure to high-growth markets as well as general insurance products,” the company said.

In terms of the deal, Sanlam Emerging Markets Ireland Limited (Semil) would increase its stake in Saham Finances from 46.6percent to 100percent.

Semil is a wholly-owned subsidiary of SAN JV, a special purpose vehicle currently held jointly by Sanlam’s wholly-owned subsidiary Sanlam Emerging Markets Proprietary Limited (85percent) and Santam (15percent).

“Our investments alongside Saham Group reflects a mutually beneficial intra-African partnership, and we hope to work together on other major projects in the future,” said Sanlam chief executive Ian Kirk.

Sanlam said it would fund the deal through a combination of available discretionary capital, debt facilities and the issuance of equity instruments.

Meanwhile, Sanlam released results for the year ended December 31, in which the group’s normalised headline earnings per share increased by 18percent. Net value of new covered business was up 15percent to R1.8bn.

“Low investor confidence in South Africa had a particularly negative effect,” Sanlam said.

The company reported net fund inflows of R35bn, compared to R41bn in the previous corresponding period. Dividend per share was up 8.2percent at 290cents a share.

“Despite the challenging economic and political environments in recent years, we have achieved pleasing growth rates in most key performance indicators,” said Kirk.

Sanlam shares on the JSE yesterday closed 0.89percent lower at R94.14.