Jubilee Holdings Limited plans a special dividend from part of Sh4.5 billion expected from the sale of general insurance stakes in Kenya, Uganda, Tanzania, Burundi and Mauritius to Sanlam Allianz Africa.
The timing and amount are, however, not yet clear as Jubilee awaits regulatory clearance from the five markets. Part of the money will be reinvested in growing life, health and asset management business.
Jubilee chairman Zul Abdul said in an interview the expectation is to have the approval by the end of the year and reward shareholders with part of the money. This will mirror a similar move taken when it sold controlling stakes to Allianz SE in 2021.
“The principal agreement is there, but we need approvals across the markets. We expect this to come to a close by the end of the year. We plan to use part of the money in declaring a special dividend for our shareholders and then reinvesting in the business,” 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 that birthed Jubilee-Allianz —an entity that has since merged with Sanlam General Insurance to form Sanlam Allianz General.
The 2021 deal left it with stakes of between 19 percent and 34 percent in the five markets. Jubilee is now selling these minority stakes, in a deal that will leave it with health insurance, asset management and life insurance business.
The merger between Jubilee-Allianz and Sanlam General was part of the team-up between Allianz SE and Sanlam Limited to form Sanlam Allianz Africa, which is a joint venture spanning 27 African countries.
The valuation of Jubilee’s disengagement deal with Sanlam Allianz Africa was based on an agreement that had been signed earlier through a put option, which the insurer exercised in September last year.
A put option right 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.
Jubilee took the decision after the Sanlam and Allianz partnership resulted in a local entity that will directly compete with Jubilee, changing the context that was there in 2021 when it partnered with Allianz to form regional insurance business units.
The completion of the deal will see Jubilee Holdings relinquish its entire 34 percent stake it holds 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 the 19 percent stake it holds in Jubilee Allianz General Insurance Burundi and the 15 percent stake it owns in Jubilee Allianz General Insurance (Tanzania) Company Limited.
Mr Abdul said there is no immediate priority for Jubilee to re-enter the general insurance business. He said the immediate focus will be on growing the health, life and asset management businesses, which he said have posted growth that has more than compensated for the relinquished general insurance business.
“You will see more investments in the three business lines (health, life and asset management). We see growth potential and we will continue to grow organically. We want to develop products that appeal to different generations,” said Mr Abdul.
