JOHANNESBURG - South African financial services group, Sanlam Life Insurance, on Monday entered into agreements to acquire 100 percent of the issued share capital of Absa Consultants and Actuaries (ACA) from Absa Financial Services for a consideration of R285 million.
ACA houses the entire employee benefits offering of the Absa Group and provides consulting on asset, actuarial, health and benefit, and also administration to retirement funds in the South African retirement fund market.
It has a substantial book of stand-alone funds as well as a commercial umbrella fund and has in total 119 retirement funds with 339,614 active and inactive members, and assets of approximately R84 billion under administration.
Sanlam Employee Benefits (SEB) chief executive, Dawie de Villiers, said the transaction will provide SEB with further scale in a market where the opportunities to exponentially grow the administration and consulting parts of the business are limited.
"Scale is fundamentally important in the employee benefits industry to ensure a sustainable business model. In this regard the potential transaction positions us very well to further expand our product offering and service levels to clients and intermediaries," De Villiers said.
Managing executive for fiduciary services at Absa Financial Services, Marcel de Klerk, said that while ACA was performing well, it will benefit more from operating in the SEB environment where the core focus is employee benefits.
"The employees of ACA will remain employed by ACA post the transaction. We believe Sanlam Life will be a suitable shareholder of ACA and will be capable of providing support where necessary due to its significant operations in both the private and umbrella fund markets as well as its credibility in the market place," De Klerk said.
"ACA will continue to fulfill its contractual obligations to its clients as normal prior to and after the transaction is concluded. We therefore do not foresee a disruption in services or the quality of service that our clients have come to expect."
De Klerk said the transaction was expected to be concluded by the end of 2017. However, the transaction remains subject to certain conditions precedent including obtaining the necessary regulatory approvals, which includes the approval of the Competition Tribunal.
-AFRICAN NEWS AGENCY