ARC buys stake in Alex Forbes

Patrice Motsepe’s African Rainbow Capital (ARC) has clinched its latest deal in the financial services sector, with shareholders of the Alexander Forbes’ group approving its R753m bid to buy its African operations.

Patrice Motsepe’s African Rainbow Capital (ARC) has clinched its latest deal in the financial services sector, with shareholders of the Alexander Forbes’ group approving its R753m bid to buy its African operations.

On Friday, these shareholders approved ARC’s deal to buy 10% of Alexander Forbes Limited, the vehicle in which the retirement administrator holds its African operations, which delivered R475m in profits to the group in its last financial year.

Alexander Forbes CEO Andrew Darfoor said on Friday any conflicts of interest between ARC co-CEO Johan van Zyl, who will take over as chairman of the Sanlam board in June 2017, will be managed appropriately. Sanlam operates an employee benefits business, a direct rival to some of Alexander Forbes’ units. “We are a commercial partner with Sanlam across a number of business areas,” said Darfoor.

“In relation to Dr Van Zyl — we welcome and value his future contribution to our strategic agenda alongside that of ARC. Where clear conflicts of interest arise, Dr Van Zyl will be recused, in a similar manner to how we recuse Mercer board directors where similar conflicts arise with either [Marsh & McClennan Companies or Mercer].”

Health, retirement and investment consulting firm Mercer is Alexander Forbes’ largest single shareholder, holding 33% of its shares; and William Simon O’Regan, an executive at the US company, has served on the Alexander Forbes board since 2014. Darfoor said the deal with ARC did not need to be approved by the Competition Commission.

The deal will accelerate Darfoor’s plans to refocus the group on Africa, which gained traction with its December announcement that it would sell its 60% interest in UK actuaries Lane, Clark & Peacock to that company’s partners and Inflexion Private Equity for £75.4m.