June 2 – South Africa’s largest insurer Sanlam said on Tuesday it bought out the remaining 65% stake in Nigerian insurance business FBN Insurance it did not already own from First Bank, deepening its presence in the West African country.
Sanlam did not disclose the value of the deal, which will now give the company full control of the joint venture that began with First Bank in 2011.
This indication became evident on Monday when FBN Holdings Plc formally notified the Nigerian Stock Exchange (NSE) as statutorily required of the ongoing discussions to divest her 65 percent stakes in one of its subsidiaries, FBN Insurance subject to all regulatory approvals.
An authoritative source at the National Insurance Commission (NAICOM) who spoke to newsmen on condition of anonymity confirmed that the two institutional shareholders are still in talks.
A source at the commission said: “We are aware that FBN Holdings and Sanlam Group are still very much in talks. They have kept us abreast of the ongoing discussions.”
The source added that nothing “has been concluded. What FBN Holdings has done is just performing a requisite statutory notification to the Nigerian Stock Exchange when listed companies are embarking on such transactions.
“They will still return to us here at NAICOM as the regulators of the insurance business for a final sign off. When consummated, the transaction will witness the transfer of FBN Holdings’ 65 percent stake in FBN Insurance Plc to the group’s long-standing institutional investor, the Sanlam Group.
“The group is one of the largest financial services groups in Africa with over 100 years Insurance business experience and presence in 44 countries across the world and an unmatched heritage of leadership and excellence along the way. Sanlam belongs to the top three exclusive leaders club in insurance business in 11 African countries.
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“The Sanlam Group, which already holds 35 percent stake in FBN Insurance company will then take over the running of FBN Insurance as its full fledge subsidiary.
“The transaction has so far involved extensive negotiations and thorough due diligence undertaking, both done in strict compliance with the regulatory requirements and intended to benefit all stakeholders.
“This strategic move by FBN Holdings to divest from FBN Insurance may be a deft move by the group to gain more liquidity in a bid to leverage its strength further in the core banking space where it has remained one of the top players. The move may also delight shareholders with greater value for their investment,” the source explained.
FBN Insurance was established as a life insurer in 2010 with a set vision to be Nigeria’s first choice in wealth creation and financial security.
The entity has grown in leaps and bounds to become a specialist life insurance company offering a broad range of investment and risk insurance products and is known for its quality of service, integrity, innovation and professionalism.
FBN insurance has consistently declared dividends to shareholders in the past seven years; its declaration of dividends has consistently increased by an average of 50 percent year on year. Using any parameter, it can be safely said to be in a fantastic financial state of health.