Jubilee Holdings Limited will receive Sh4.5 billion for the sale of general insurance stakes in Kenya, Uganda, Tanzania and Mauritius to Sanlam Allianz Africa.
The insurer has entered into an agreement with Sanlam Allianz Africa —a long-term strategic joint venture arrangement between South Africa’s Sanlam Group and Germany’s Allianz SE— with the deal awaiting regulatory clearance.
Jubilee chairman Zul Abdul told the Business Daily in an interview that the deal is valued at Sh4.5 billion.
He said Jubilee has decided on the move to avoid a scenario where it would directly compete with a new outfit created out of a partnership between Sanlam and Allianz.
“Allianz and Sanlam have merged in the African context. Sanlam is also involved in life and medical business, which competes directly with what we do [under Jubilee Life and Jubilee Health]. So strategically, it does not make sense to continue with this partnership,” said Mr Abdul.
In 2021, Jubilee sold majority stakes in its general insurance businesses in Kenya, Uganda, Tanzania, Burundi and Mauritius to Allianz SE in a Sh10.8 billion deal.
Now, Allianz, which has teamed up with Sanlam to form a joint venture spanning 27 African countries, will purchase the remaining stakes alongside its partner as the new pan-African financial services outfit takes shape.
The value of Jubilee’s new deal with Sanlam Allianz Africa is based on an agreement that had been signed earlier through a put option. Mr Abdul termed the price as “extremely good.”
A put option is a contractual right that gives one party (the holder of the option) the rights to sell an asset to another party at a pre-agreed price within a certain timeframe.
“The Sh4.5 billion price is based on the same pricing we got in the initial sale when we partnered with them. The deal is purely on the price we had already agreed upon,” said Mr Abdul.
The deal will see Jubilee Holdings sell its entire 34 percent stake in Jubilee Allianz General Insurance (Kenya) Limited, Jubilee Allianz General Insurance (Uganda) Company Limited, and Jubilee Allianz General Insurance (Mauritius) Limited.
In addition, Jubilee will sell its 19 percent stake in Jubilee Allianz General Insurance Burundi and the 15 percent stake it owns in Jubilee Allianz General Insurance (Tanzania) Company Limited.
The completion of the deal will leave Jubilee Holdings without general insurance business, save for the health insurance business, which it runs under Jubilee Health Insurance.
Mr Abdul said after the completion of the deal, Jubilee will be considering “all options available to us,” including the possibility of going back to the general insurance business to ensure it continues to offer a “complete basket of products.”
“It is something that we will certainly keep in mind. At the moment, it is early days, but we will certainly be considering all possible options,” he said.
Top player
In Kenya, Sanlam General Insurance is set for a merger with Jubilee Allianz General Insurance in what will be part of the strategic alliance between their parent companies.
The merger will see Sanlam General, which is part of Sanlam Kenya Plc, transfer part of its assets and liabilities to Jubilee Allianz General Insurance—the entity that was formed out of the Jubilee and Allianz deal.
In 2023, Allianz SE and Sanlam Limited said their joint venture, called Sanlam Allianz, would have a combined group equity value of approximately R35 billion (Sh254.2 billion), giving customers a broader offering of insurance products tailored to their needs.
The two firms aim to be among the top three players in both market share and profitability in the markets in which the joint venture will operate.
Allianz SE, early in the year, increased its indirect stake in Sanlam Kenya to 28 percent from 23.09 percent after paying R4.5 billion (Sh31.3 billion) to acquire an additional stake in Sanlam Allianz.
Sanlam and Allianz contributed their respective African operations into the JV called Sanlam Allianz Africa Proprietary Limited (shortened as Sanlam Allianz) on September 4 last year. Sanlam excluded South Africa operations, while Namibia business was included in October last year.
