South Africa’s largest insurer, Sanlam Ltd., has sold its stake in Ghanaian holding company, Enterprise Group’s Insurance business for $130 million but will retain a presence in the country, Sanlam said on Friday, June 23, 2017.
Enterprise Group announced the decision in a statement issued to the media recently. However, it did not give reasons for parting ways with Sanlam.
According to the statement, “Enterprise Group Limited (Enterprise Group) has informed the Ghana Stock Exchange of an impending transaction to introduce a new strategic partner in place of Sanlam Emerging Markets Proprietary Limited of South Africa.”
It then announced that the new strategic partner, Black Star Holdings Limited (BSI-IL), a wholly-owned subsidiary of LeapFrog Strategic African Investments (LSAI), will acquire stakes in three subsidiary companies, namely Enterprise Life, Enterprise Insurance and Enterprise Trustees.
Meanwhile, Sanlam has issued a statement on the matter, indicating that it was still committed to Ghana.
Giving a background to its relationship with Enterprise Group in a statement copied to ghanabusinessnews.com, Sanlam said the partnership between Sanlam and Enterprise, the second largest life insurance company in Ghana, started in 2005 when Sanlam acquired 100 per cent of African Life.
“In 2010, Sanlam and Enterprise Group entered into a joint partnership to establish Enterprise Trustees Limited, in which Sanlam held 40 per cent. In an effort to expand its general insurance footprint, Sanlam also acquired a 40 per cent shareholding in Enterprise Insurance Company, one of the largest general insurance companies in Ghana, in October 2014,” it said.
It notes further that, “the Sanlam Group, through its Sanlam Emerging Markets business cluster, remains committed to the Ghanaian market and will seek opportunities to affirm this position following the recent disposal of the Group’s shareholding in Ghana-based Enterprise Group Limited.”
Pointing what it describes as a significant contribution of Enterprise, Sanlam said Enterprise made a significant contribution to its growth over the years.
According to Sanlam, in 2016 the Ghanaian company’s new business volumes reached ZAR281 million (equivalent to $21.9 million), its contribution to value of new business was ZAR53 million, which is about $4.1 million and it posted a net operating profit of ZAR105 million ($8.1 million).
Sanlam is not leaving Ghana, however. The company says it will keep its presence in Ghana through its partnership with Saham Finances of Morocco.
“In the 12 years since the establishment of our partnership with Enterprise, we have enjoyed a mutually beneficial relationship. Going forward, Sanlam is committed to the West Africa region and through our partnership with Morocco-based SAHAM Finances, in which we hold a 46 per cent stake, we retain a presence in Ghana. In line with our growth strategy, we will in future seek appropriate, value-accretive opportunities to further entrench our presence in the Ghanaian market,” Sanlam Emerging Market’s Chief Executive Officer, Junior Ngulube was quoted as saying.
Sanlam owns and manages the Accra Mall. Before the separation with Enterprise, Sanlam held the following shares in Enterprise Group’s Enterprise Life, 49 per cent, Enterprise Insurance, 40 per cent and Enterprise Trustees, 40 per cent.
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