Mauritian insurance company MUA Ltd (MUA) has finally received regulatory greenlight to acquire Nairobi based Saham Assurance company in a deal worth Sh1.23 billion.
The firm Monday said it had concluded the transaction which began with the January’s signing of the Sales Purchase Agreement after it got approvals from the Insurance Regulatory Authority (IRA, Kenya), the COMESA Competition Commission and the South African Reserve Bank as well as the Competition Authority of Kenya.
The January SPA had attracted regulatory caution after the firm reportedly announced the deal before notifying IRA. Its bosses were summoned after the regulator termed the announcement ‘immature.’
The move is second such acquisition by the Mauritian biggest underwriter by market share, marking its expansion into the East African market where it had acquired of Phoenix Transafrica Holdings (with a presence in Kenya, Tanzania, Uganda and Rwanda) in 2014.
Saham Kenya, (previously owned by the Pan-African insurance group Sanlam Pan Africa) has a market share of 1.54 per cent with Sh1.62 billion in premiums and is expected to combine with the MUA insurance in Kenya to boost market presence to about three percent.
MUA Group Chief Executive Officer Bertrand Casteres told Business Daily that the firm which controls the largest insurance market share in Mauritius had settled on due to its good corporate governance and its ‘strong reputation in the market.’
“We carried out our due diligence and we found Saham transparent and professionally run having been part of a global chain network and had satisfactory governance principles. This move also fits well within our three-year strategic plan to 2020 which is to expand by acquisition,” Mr Casteres said in an interview.
The merged entity will be headed by Saham Kenya, Chief Executive Officer of Lydia Kibaara while the current CEO of MUA Kenya, Ashraf Musbally, retains oversight of the
MUA’s interest into the Kenyan market was first revealed during President Uhuru Kenyata’s visit to Mauritius last year when the firm announced plans to boost its Kenyan investment by $30 million (Sh3 billion), through the acquisition of a local insurer.
MUA entered the Kenyan market through a Sh2.2 billion acquisition of Phoenix Trans Africa Holdings with operations in Kenya, Tanzania, Uganda and Rwanda under Phoenix East Africa Limited.
Saham was bought by Sanlam in 2018 but the business was not merged with the multinational’s other subsidiary in the country (Sanlam Kenya).
This meant they held two separate licenses. Following pressure from the regulator to merge the licences, Sanlam offered to sell off Saham.