AON fi­nally ex­its Africa, Cap­i­tal­works takes over

Kenya, Uganda, Zim­babwe, Malawi, Le­sotho, Namibia to re­brand as Minet

The East African - - MARKETS - By JAMES ANYANZWA The Eastafrican

Global in­surance bro­ker­age firm AON has fi­nally ex­ited Africa, sell­ing off its en­tire share­hold­ing in 10 sub­sidiaries to South African pri­vate equity com­pany Cap­i­tal­works.

The move sig­nals the de­creas­ing in­flu­ence of multi­na­tion­als on the con­ti­nent, after the 2008 global fi­nan­cial cri­sis left many firms seek­ing fi­nan­cial sup­port from their re­spec­tive gov­ern­ments.

Un­der the new ar­range­ment, Uk-head­quar­tered AON will con­tinue serv­ing its global clients through an agency re­la­tion­ship with the newly branded Minet Hold­ings Africa Ltd, which will be­come AON’S largest global net­work correspondent.

“Since the fi­nan­cial cri­sis on Wall Street, there has been tight reg­u­la­tion and su­per­vi­sion of multi­na­tion­als by par­ent com­pa­nies and the sanc­tions are so strin­gent that to put to­gether an in­fra­struc­ture to com­ply with these rules is ex­pen­sive,” Joseph On­sando, chief ex­ec­u­tive of Minet Hold­ings Africa told The Eastafrican. “As a re­sult, these for­eign com­pa­nies find it con­ve­nient to re­lin­quish the own­er­ship and man­age­ment of their sub­sidiaries to the lo­cals.”

Kenya, Uganda and Tan­za­nia are among the coun­tries that AON has ceased oper­a­tions in. Oth­ers are Zim­babwe, Malawi, Le­sotho, Namibia, An­gola, Mozam­bique and Swazi­land.

AON Group owned a 60 per cent share­hold­ing in AON Kenya, a 100 per cent share­hold­ing in AON Uganda and a 50 per cent stake in AON Tan­za­nia. All the shares have been trans­ferred to South African PE firm Cap­i­tal­works.

Cap­i­tal­works fo­cuses on ac­quir­ing mid-sized com­pa­nies in­volved in man­u­fac­tur­ing and value-added dis­tri­bu­tion and busi­ness ser­vices.

The trans­ac­tion that sealed AON’S exit from Africa was con­cluded on Novem­ber 6, with Cap­i­tal­works al­low­ing six sub­sidiaries — Kenya, Uganda, Zim­babwe, Malawi, Le­sotho and Nam­bia — to be re­branded as Minet.

Tan­za­nia, An­gola, Mozam­bique and Swazi­land will be re­branded by Fe­bru­ary 2018 after re­ceiv­ing ap­provals from their re­spec­tive gov­ern­ments.

“As Minet, we have a huge num­ber of clients that we shall con­tinue to serve,” said Mr On­sando.

Minet Group plans to ex­pand fur­ther in Africa, lever­ag­ing on tech­nol­ogy and in­no­va­tion.

AON’S exit from Africa is the lat­est in a se­ries of equity trans­ac­tions that have seen multi­na­tion­als exit or scale down their oper­a­tions on the con­ti­nent and other emerg­ing mar­kets fol­low­ing the tight­en­ing of reg­u­la­tory rules by their par­ent com­pa­nies.

Last year, US multi­na­tional AIG an­nounced a sim­i­lar plan to exit from “smaller” mar­kets abroad, start­ing with Uganda.

AIG also said that it would sell off its Latin Amer­i­can and East­ern Euro­pean busi­nesses to Cana­dian com­pany Fair­fax Fi­nan­cial Hold­ings Ltd.

AIG was bailed out by the US gov­ern­ment dur­ing the 2008 fi­nan­cial cri­sis, the worst ever eco­nomic dis­as­ter since the Great De­pres­sion of 1929.

‘‘After care­ful con­sid­er­a­tion and an in-depth re­view, AIG will stop of­fer­ing in­surance prod­ucts in the gen­eral mar­ket in Uganda,” AIG said at the time.

In 2013, AIG’S busi­ness in Uganda was grouped with AIG’S busi­ness in Kenya un­der a broader East African busi­ness re­gion.

Pic­ture: File

Aon Minet In­suarance Bro­kers gen­eral man­ager Sammy Muthui. Aon has sold off its en­tire share­hold­ing in Africa to South African pri­vate equity firm Cap­i­tal­works.

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