S. Africa’s Sanlam to up stake in 2 Shriram Group insurance JVs
South African financial services giant Sanlam will raise its holdings in two of its insurance joint ventures with Shriram Group.
The transaction will result in Sanlam’s effective economic shareholding in Shriram General Insurance Company (SGIC) increasing from the current 40.25 per cent to 50.99 per cent and that in Shriram Life Insurance Company (SLIC) going from 42.38 per cent to 54.40 per cent.
‘This strengthens Sanlam’s position in India, a market that is core to Sanlam’s stated strategy, and also enhances Sanlam’s geographic diversification and scale in emerging markets outside of Africa.”
EXIT COMPLETED
At the same time, Sanlam’s effective economic shareholding in Shriram Finance Ltd (SFL) will decrease from 10.19 per cent to 9.54 per cent.
The deal will see the acquisition of an effective 6.29 per cent in SGIC and 7.04 per cent in SLIC from TPG India Investments II Inc, the acquisition of an effective 4.45 per cent in SGIC and 4.98 per cent in SLIC from the Shriram Ownership Trust, and the disposal of a part of Sanlam Life’s direct holding in Shriram Finance Ltd. With this, TPG Investments has completed its exit from Shriram Group companies.
“This transaction represents a unique opportunity for Sanlam to increase its stakes in SGIC and SLIC and achieve 50 per cent plus effective economic interest in the insurance entities. It represents a natural next step for Sanlam and has a number of strategic benefits,” Sanlam said.
“It further strengthens Sanlam’s position in India, a market that is core to Sanlam’s stated strategy, and also enhances Sanlam’s geographic diversification and scale in Emerging Markets outside of Africa,” it added.
The consideration payable to acquire the combined 10.74 per cent in SGIC and 12.02 per cent in SLIC will be partially funded using the net proceeds from the disposal of the SFL shares.
The balance of the consideration of ZAR2.0 billion will be funded using a combination of available capital resources.
On March 28, 2024, Sanlam Life sold 1.59 per cent (of its 2.01 per cent direct holding) in SFL to Shriram Value Services, at the listed market value of ₹2,386 per share, resulting in gross proceeds of ZAR 3.3 billion (₹1,427crore)