Insurance firms Allianz SE and Sanlam are renegotiating a final shareholding structure as they finalise the formation of a multibillion-shilling joint venture that will have an extensive footprint across Africa including in Kenya.
The two firms announced on Tuesday that they have received regulatory approvals for the joint venture that will create the Pan-African financial services company with a presence in 27 countries.
Sanlam and Allianz had in May 2 last year agreed on an initial shareholding split of 60:40, respectively, but now say they are working on certain post-closing adjustments to get the final shareholding split.
“Provisions have been included in the transaction agreements for certain post-closing adjustments to be performed to obtain the final joint venture company shareholding split,” said Sanlam in an update to shareholders.
“The process to determine the post-closing adjustments includes the preparation of closing accounts and will commence shortly after the implementation of the transaction.”
Allianz and Sanlam say the joint venture is expected to have a combined group equity value of approximately R35 billion (Sh266 billion), giving customers a broader offering of insurance products tailored to their needs.
The 60:40 ownership was based on the relative appraised value of the assets the two were contributing as of June 30, 2021. The adjustment will likely factor in the changes that have happened over the two years.
Shareholders will be notified of any amendments in the shareholding split following the completion of the post-closing adjustments.
The joint venture will operate as SanlamAllianz. The two firms are aiming at becoming among the top three players, in both market share and profitability, in the markets where the venture will operate.
“The combined expertise and resources of our respective companies will enable us to provide innovative solutions and services to meet the ever-evolving needs of our clients on the African continent,” says Paul Hanratty, chief executive at Sanlam Group.
Sanlam and Allianz will contribute their respective African operations into a newly incorporated joint venture. South Africa is excluded from the deal while Namibia will be included later.
“We want to unlock the potential of multiple fast growing African markets and access a wider range of customers, particularly in the corporate segment,” said Christopher Townsend, a board member at Allianz SE.
Allianz will contribute its ownership in its African subsidiaries including majority stakes in Jubilee general insurance businesses in Kenya, Uganda, and Burundi which it acquired last year.
Sanlam will contribute its interests in Sanlam Kenya (57.1 percent) and other operations. The multinational’s operations in South Africa, India, the Middle East, and Malaysia will be excluded from the deal.
Once Namibia is included in the deal, Allianz will have the option to increase its shareholding to a maximum of 49 percent, leaving Sanlam with a controlling stake.
