Business Day

Sanlam closer to getting Assupol

The Competitio­n Commission has approved Sanlam’s R6.5bn bid to acquire smaller rival Assupol.

But the commission stipulated a moratorium on retrenchme­nts for three years as a condition.

First announced in February, the deal will see SA’s largest nonbanking financial services group acquire Assupol through its wholly owned subsidiary, Sanlam Life Insurance.

“The commission is of the view that the proposed transactio­n is unlikely to substantia­lly lessen or prevent competitio­n in any market,” the commission said in a statement on Wednesday.

To address employment concerns, the merged entity would not retrench employees for three years after the merger implementa­tion date.

The Competitio­n Tribunal, which acts as a court in competitio­n and merger matters, still needs to approve the transactio­n, which would be implemente­d through a scheme of arrangemen­t.

With a market capitalisa­tion of about R172bn on the JSE, Sanlam operates throughout Africa, India, Malaysia and several other countries.

The group provides financial solutions such as life and general insurance, financial planning, retirement, investment­s and wealth management to institutio­nal clients and consumers across all market segments.

Since Paul Hanratty assumed leadership as group CEO in 2020, Sanlam has been growing aggressive­ly by acquisitio­n to strengthen its insurance division.

STRATEGIC MOVE

Assupol, which began in 1913 as a burial society, is the holding company of the Assupol group of companies operating through two wholly owned subsidiari­es: Assupol Life and Assupol Investment. Assupol Life offers funeral cover, life cover, pre-and postretire­ment and savings products to individual clients and funeral cover to group schemes in SA.

As of June 2023, Assupol generated gross insurance premium revenue exceeding R5bn.

The merger has been touted as a strategic move that will further strengthen the two companies’ position in the market and enhance their ability to provide comprehens­ive insurance solutions. The proposed deal was set in motion after longtime Assupol shareholde­rs Bidvest, which holds 46.02% of Assupol’s securities, as well as the Internatio­nal Finance Corporatio­n (IFC), holding 19.41% of Assupol, announced they intended to dispose of their respective shareholdi­ngs.

The Assupol board of directors decided on Sanlam as a potential buyer after considerab­le deliberati­on and assessment of the potential advantages for all stakeholde­rs, said the company.

Assupol is listed on the Cape Town Stock Exchange. Following the merger, Assupol intends to continue trading under its own brand.

In July, Business Day reported that niche private banking and wealth management group Investec was in line for a R1.7bn cash injection from the proposed acquisitio­n, as it owns a stake in Assupol through one of its subsidiari­es.

Sanlam’s share price moved up 1.17% to R81.35 at 2pm on Wednesday.