Insurance multinational Sanlam Limited intends to accelerate the growth of its African business through its joint venture with Allianz SE which will bring together their interests in multiple markets including Kenya.
The companies are set to start their 10-year partnership in three months, combining their interest in their local subsidiaries Sanlam Kenya and Jubilee Allianz General Insurance Kenya among other assets spread across various markets.
“Approvals for the Allianz Joint Venture remain on track, and we expect implementation around mid-2023,” South Africa-based Sanlam said in a trading update.
“The African portfolio will be considerably expanded and diversified, with reasonable cost, capital and revenue synergies, through the creation of a joint venture with Allianz SE (subject to regulatory approvals).”
Sanlam will own a 60 percent stake in the joint venture while Allianz will hold a 40 percent interest with an option to buy an additional nine percent ownership in the future. Allianz will contribute its ownership in its African subsidiaries, including majority stakes in Jubilee general insurance businesses in Kenya, Uganda, and Burundi which it recently acquired in cash transactions.
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.
It is not clear whether the joint venture will move beyond asset transfers to take full ownership or merge the businesses in which the parties have controlling stakes in the various markets.
Sanlam Kenya is listed on the Nairobi Securities Exchange and has minority shareholders including billionaire investor Baloobhai Patel with a 20.7 percent stake.
The multinational said the joint venture will allow the parties to leverage each other’s strengths to unlock synergies.