South African insurers Sanlam Ltd. and Santam Ltd. agreed to buy a 30 percent stake in Saham Finances SA of Morocco for $375 million to gain access to insurance markets in West and North Africa.
The stake will be purchased from the Abraaj Group, the International Finance Corp. and an IFC-managed fund, Sanlam, the biggest South African-based insurer, and Santam said in a statement Tuesday. Sanlam will own 75 percent of a special-purpose vehicle holding the stake and Santam 25 percent.
Sanlam, which owns 60 percent of property & casualty insurer Santam, has been expanding in Africa and Asia to help boost profit as the economy in its domestic market slows. Saham Finances, a Casablanca-based arm of the Saham Group founded by Moulay Hafid Elalamy in 1995, operates in 26 countries across North, West and East Africa and the Middle East and is the largest insurer on the continent outside of South Africa, the buyers said.
The deal will help the Sanlam group enhance its African operations by increasing its reach in Francophone, Anglophone and Lusophone Africa and providing access to untapped insurance markets in North and West Africa, which have “fast-growing economies and underpenetrated insurance markets,” the buyers said. The transaction is expected to be completed in the first quarter of next year.
Sanlam, based in Cape Town, will make the purchase through its Sanlam Emerging Markets unit. Santam will fund its $93.8 million share of the acquisition from sales of equity holdings and foreign cash resources.