Jubilee mulls cash call to fund acquisition and merger targets

Jubilee Insurance is set to make a shareholders’ cash call to partly finance its regional expansion plans, board chairman Nizar Juma said Tuesday.

Jubilee said that talks were at an advanced stage to buy regional companies with a presence in more than three countries. Currently the insurer has a presence in Kenya, Uganda, Tanzania, Burundi and Mauritius.

“We have informed our shareholders that we will need their contributions in terms of financing our acquisitions or mergers. We are going to announce a big thing this year,” said Mr Juma after Jubilee’s annual general meeting in Nairobi.

The company introduced to shareholders its new regional chief executive officer Mike Durek, a former AIG chief executive based in South Africa, who will be in charge of driving the expansion bid across the region.

Acquisitions

Mr Durek said that two acquisitions could be concluded by the end of this year. He declined to mention the companies they are in talks with, or the amount Jubilee intends to spend on the buyouts.

“We are looking at companies that meet the objectives of Jubilee Insurance including its core principles and we are targeting buyouts both in Kenya and in the region,” said Mr Juma.

The firm is also seeking to grow its market share in the increasingly competitive east African market.

It is targeting firms that are ready to sell majority stakes, with an eye on growing its earnings in coming years.

The drive to acquire rival firms is expected to step up deal-making in the region’s insurance market.

READ: Britam and Jubilee lay the ground for bruising turf war

This started with the acquisition of CfC Holdings — which owned CfC and Heritage Insurance — by South Africa’s Standard Bank in 2008 after a lull in deal making.