Jubilee bags KSh4.5bn from sale of general insurance stakes to Sanlam Allianz.
Nairobi, Kenya | BUSINESS DAILY | 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. 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 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.
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.
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SOURCE : Business Daily
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