Sanlam Emerging Markets buys stake in Ghana business for R240m

October 2, 2014


Sanlam Emerging Markets CE Heinie Werth says the in the short term, the firm is likely to focus on deal making in Africa.

SANLAM Emerging Markets deepened its presence and partnership in Ghana beyond life insurance on Wednesday by acquiring a 40% stake in short-term insurance business Enterprise Insurance for R240m.

The deal by Sanlam Emerging Markets in Ghana comes a day after it announced it was buying a 28.7% stake in Afrocentric Healthcare Assets Proprietary in a deal which could be valued at just over R700m.

In the six months ended June, Sanlam had about R3bn in discretionary capital and the two deals leave it with about R2bn for future investments.

Sanlam Emerging Markets CE Heinie Werth said that in the short term, the firm was likely to focus on deal making in Africa.

On the short-term insurance deal in Ghana and why the emerging markets division was investing in the West African country, whose economy is going through a tough period, he said: “We look at the long term. We started in Ghana about 2003. It’s one of the successful stories in our cluster.

“I agree Ghana is going through challenges. If you look from a bigger perspective, there’s still a lot of companies who invest in Ghana. There’s still confidence,” Mr Werth said, alluding to Ghana’s third eurobond of $3bn, which was oversubscribed last month. However, Ghana opted to take $1bn, which it will use for capital expenditure.

Sanlam indicated that insurance penetration in Ghana was about 1.1%, creating opportunities. According to Sanlam, the Ghana insurance market has grown at an average rate of 26% annually over the past five years.

“We see the current issues in the Ghana economy as more temporary,” Mr Werth said.

Commenting on the deal, Trevor Trefgarne, the chairman of the Enterprise Group, said: “Enterprise Group sees this further strengthening of its partnership with the Sanlam Group as an exciting moment in its history. The transaction brings together two great financial services players with nearly 200 years of doing business in Africa, and holds much promise for the future of both groups.”

Beyond short-term and life insurance in Ghana, Mr Werth said his company had appetite to offer asset management services.

He said the logical next phase of expansion was in Mozambique, Angola and Zimbabwe. “We would like to do something in all these countries in the next 12-18 months.” The company has operations in Botswana, Namibia, Swaziland, Malawi, Zambia, Tanzania, Uganda, Rwanda, Kenya, Nigeria and Ghana. Source: BD Live