Old Mutual Transfers 12.5% Stake to Support Black Empowerment in South Africa

April 20, 2005

Old Mutual, South Africa’s largest insurer, whose shares are traded both in Johannesburg and London, will transfer approximately 12.5 percent ownership in the company to its employees and selected investment groups, as part of the country’s plans to increase black ownership in South African companies.

The shares are valued at approximately $1.2 billion. The largest distribution, around 40 percent, will go to company employees. Two investment groups, Wiphold, a women’s investment fund, and Brimstone, a consortium that includes groups representing lawyers, doctors and other professionals and led by a selection of black business people and former government officials, will divide a 24 percent share.

The transfer is one of the largest yet in furtherance of government and private initiatives aimed at giving the country’s majority black population a greater stake in South African business.

Zurich Financial Services Group announced last week that its majority owned subsidiary, South African Eagle Insurance Company Limited (SA Eagle), would sell a 10 percent stake to Royal Bafokeng Finance, a company wholly-owned by the Royal Bafokeng Nation (See IJ Website April 18).

The BBC quoted Old Mutual CEO Jim Sutcliffe as stating: “The breadth of involvement means that over 500,000 South Africans across all nine provinces, amongst all our stakeholders, will have an interest in our success.”

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