Sanlam offers R6.5bn for Assupol
● South Africa’s biggest insurer Sanlam has made a R6.5bn offer to buy its smaller competitor Assupol.
The offer comes after an announcement last April when Assupol’s two largest shareholders, Bidvest, which holds almost half of Assupol’s shares, and the International Finance Corp (IFC), which holds about 20%, “noted their intention to commence a sale process in respect of their interests in Assupol”, Sanlam and Assupol said in a joint statement on Friday.
Sanlam said it would fund the acquisition with cash, guaranteed by Standard Bank.
The offer, which exceeds Assupol’s market value of about R5bn, will be carried out through a scheme of arrangement, pending shareholder and regulatory approval.
“Upon implementation of the scheme, the Assupol ordinary shares will be delisted from the CTSE [Cape Town Stock Exchange] and ... Assupol will be a wholly owned subsidiary of Sanlam Life,” the companies said.
An independent board, including Assupol chair Reuel Khoza, was established to consider the terms of the Sanlam offer and make a recommendation to Assupol shareholders. The board has advised shareholders to vote in favour of the bid.
“We believe this acquisition by Sanlam will bring even greater opportunities for growth and success,” Khoza said.
“It will not only strengthen our position in the market but also enhance our ability to provide exceptional value to our clients,” he added.
Since its inception in 1913, Assupol, which operates through its two fully owned subsidiaries, Assupol Life and Assupol Investment Holdings, has grown from a burial society for members of the South African police into a life insurer. It offers funeral, life, savings and retirement products.
“Sanlam sees Assupol as a strong strategic fit within the Sanlam Group that can enhance and contribute to Sanlam’s existing scale in the retail mass segment,” the companies said.
“This market segment is of strategic priority for Sanlam and is receiving significant focus and support to ensure strong ongoing growth. Furthermore, Assupol’s strong customer base in Gauteng can strengthen the strategic position in this competitive province,” they added.