Pursuing it's expansion objectives, South African leading insurer Sanlam has acquired a 60% share in MultiChoice's insurance division, While MultiChoice retains a 40% stake in the venture.
According to a Reuters report, the parties have agreed on a deal with an upfront payment of 1.2 billion rand (approximately $66 million), along with a potential performance-based earning up to 1.5 billion rand.
The agreement stipulates a potential earn-out based on the insurance business's performance, specifically the gross written premium by the end of 2026. Additionally, a pre-acquisition dividend of 59 million rand is set to be distributed by MultiChoice's insurance arm.
According to report, the collaboration will leverage on Sanlam's robust African network and proven success in similar partnerships, while paving the way for broader financial service offerings across Africa, facilitated through its SanlamAllianz enterprise.
According to business Africa analysts
MultiChoice's vast customer base spanning 21 million households over 50 African nations and Sanlam's operations across 31 countries, will make the deal a strategic win-win for both entities in the continent's burgeoning insurance market.
Following the announcement, Sanlam's shares surged by nearly 5%, with MultiChoice experiencing a modest increase.
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