SANLAM’S share price rose by 1.03 percent to R57.96 per share yesterday after it announced talks with German insurer Allianz SE about a deal that could potentially see the local assurance and financial services group exiting it African businesses. Photo :Simphiwe Mbokazi
SANLAM’S share price rose by 1.03 percent to R57.96 per share yesterday after it announced talks with German insurer Allianz SE about a deal that could potentially see the local assurance and financial services group exiting it African businesses. Photo :Simphiwe Mbokazi

Sanlam in talks on possible deal with Allianz SE

By Siphelele Dludla Time of article published Dec 24, 2021

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SANLAM’S share price rose by 1.03 percent to R57.96 per share yesterday after it announced talks with German insurer Allianz SE about a deal that could potentially see the local assurance and financial services group exiting it African businesses.

Sanlam said it was exploring “various strategic alternatives” with Allianz, Europe’s leading insurer, in relation to their respective African business units.

Allianz is a leading global corporate insurance carrier providing risk consultancy, property-casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and speciality risks across 10 dedicated lines of business.

It has a small operation in Africa, including in countries such as Nigeria and Senegal.

Although Sanlam did not go into details, the deal will exclude Sanlam’s home operations in South Africa.

In a cautionary announcement, Sanlam warned shareholders to exercise caution when dealing in its securities until a further announcement in this regard was made.

“If these strategic alternatives result in a transaction which is successfully concluded, it may have a material effect on the price of Sanlam’s securities,” the statement said.

Sanlam’s short-term insurance subsidiary Santam said it was aware of the ongoing discussion between Sanlam and Allianz SE.

“If these strategic alternatives result in a transaction which is successfully concluded, it may have a material effect on the price of Santam’s securities,” it said.

In 2015, Sanlam and Santam acquired a 30 percent stake in Morocco-based Saham Finances which operates in 26 countries predominantly across Africa and with a presence in the Middle East, for a purchase consideration of $375 million.

Sanlam did not make much revenue from its African operations in 2020, but was looking to expand on the continent at that stage.

Sanlam and Santam already have operations spanning southern, central, eastern and west Africa, but Sanlam has equally said it wants to expand further beyond its home market.

Independent business analyst Koketso Resane said although details of this new transaction were sketchy, he thought that Sanlam was the one selling.

“Sanlam has been expanding into Africa for the last few years with limited but acceptable success,” Resane said.

“I think they are trying to offload their West African portfolio and concentrate on southern Africa, which is more predictable.”

Earlier this month, Alexander Forbes bought one of Sanlam’s large standalone employee benefits (EB) retirement fund administration business in a transaction that increased its retirement fund administration client base by 40 percent.

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