Eustacia Limited has acquired Mansard Pensions Limited from the management of AXA Mansard Insurance Plc .
The divestment which was disclosed on Saturday, followed Shareholders’ approval of the deal at the Company’s Extra Ordinary General Meeting on February 13 this year.
Recall that in February 2020, Axa Mansard, after obtaining authorisation of its shareholder at the company’s Extraordinary General Meeting (EGM), said it was divestment from its pensions business to focus on its core operations.
In an update, the insurer said after a competitive bid process, Eustacia Limited, a member of the Verod Group, was picked as the preferred bidder from others.
With this, Axa Mansard Insurance has agreed to transfer its entire 60 per cent stake in AXA Mansard Pensions (2,067,672,000 shares) to Eustacia Limited, while the minority shareholders will also transfer their 40 per cent shareholding (1,378,448,000 shares) to the new owners.
Already, the deal, which had Messer Rand Merchant Bank as the financial advisers and Aluko & Oyebode as the legal advisers, has received letters of no objection from the National Insurance Commission (NAICOM), National Pension Commission (PENCOM), and the Federal Competition & Consumer Protection Commission (FCCPC).
However, the completion of the divestment is subject to the receipt of the final approval of PenCom, the company said.
According to the CEO of Axa Mansard Insurance, Mr Kunle Ahmed, “This transaction marks a new step in AXA ́s broader strategy to focus on and grow our life, property & casualty (P&C) and health businesses across all its geographies.
“The AXA Group sees great potential in the Nigerian insurance market and believes AXA Mansard is ideally placed to capture these opportunities, thanks to its market leadership positions in health insurance, property & casualty and life insurance.
“We plan to capitalize on our successes to further build our capabilities and continue to deliver the best offers and services to our customers.”
On his part, the CEO of AXA Mansard Pensions Limited, Mr Dapo Akisanya, said, “We are confident about Verod’s strong commitment to providing the company with the requisite support to actualize our promise to our clients and stakeholders.
“As a West African investor with deep local knowledge and presence, we look forward to harnessing Verod’s unique, and world-class, attributes towards setting new standards in the industry.
“Verod has the capacity, expertise, and network, to support the business to continue to expand and to provide innovative solutions for the benefit of our current and future clients”
“We strongly believe that this is the ideal time to enter the market and that AXA Mansard Pensions provides an excellent beachhead from which to establish a consolidated position and gain market share,” said Mr Eric Idiahi, Partner at Verod.
“The National Pension Commission continues to demonstrate a strong commitment to raising standards within the industry and driving pension penetration rates in the short to medium term.
“We believe that sustaining AXA Mansard Pension’s industry-leading investment returns, excellent customer service, as well as, expanding distribution network and product offerings will facilitate the capture of the considerable growth potential within the Nigerian pensions industry, particularly following the opening of the transfer window.”
Recalled that NAICOM announced the new recapitalisation requirement in May 2019 and gave them thirteen months to comply. The recapitalisation programme requires life insurance firms to meet a minimum paid-up capital of N8.0 billion, up from N2.0 billion previously. In the same vein, general insurance companies are required to raise their minimum paid-up capital to N10.0 billion from N3.0 billion previously.
The regulatory capital for composite insurance was raised to N18.0 billion from N5.0 billion previously while reinsurance businesses are now required to have a minimum capital of N20.0 billion from a previous N10.0 billion.
AXA Mansard Insurance Plc’s latest earnings report for FY 2019 showed a 29% increase in gross premium written to N43.6 billion, up from N33.9 billion in FY 2018. The company’s profit after tax for the period grew by 17% to N2.9 billion during the period, compared to N2.5 billion in FY 2018.