Sanlam on Wednesday announced its intention to acquire all of the issued ordinary shares of African Life Assurance.
”Sanlam has identified the entry-level life insurance market as an important component of its growth strategy. This is a revenue-enhancing acquisition and Sanlam is confident that acquiring African Life will improve our earnings and return on embedded value,” Sanlam CEO Johan van Zyl said in a statement.
African Life will become a wholly owned subsidiary of Sanlam and the listing of its ordinary shares on the JSE will be terminated.
African Life operates in the entry-level market in South Africa and seven other African countries. This market offered considerable opportunity due to low life assurance penetration in these growing and increasingly liberalised economies.
”The African Life board believes that Sanlam’s offer provides an opportunity to existing shareholders to unlock value at a fair price. From a management perspective the transaction facilitates and builds on the existing vision of the business,” Jeremy Rowse, CEO of African Life said.
Sanlam group shareholders’ funds currently holds 20,5% of African Life’s ordinary shares.
African Life’s black economic empowerment partner said it supported Sanlam’s offer.
”Sanlam’s offer recognises the market opportunities for the company,” said African Life board member and Mvelephanda Group deputy chairperson, Mikki Xayiya. – Sapa