Sanlam last week proposed to buy its smaller competitor, Assupol Holdings Limited, for around N$6.5 billion. Sanlam has officially stated its intention to acquire 100% of the issued ordinary shares of Assupol through a scheme of arrangement, with a fallback general offer to Assupol shareholders.
If approved, the proposed transaction, which will close at the end of October 2024, will see Assupol become part of Sanlam’s retail mass cluster, and together with Sanlam Sky, Safrican and the Capitec JV, will place Sanlam in a strong position to service local and regional financial services’ needs.
Sanlam’s retail mass cluster CEO, Bongani Madikiza, stated that he will ensure Assupol gets the support it needs to flourish in the Sanlam Group. Assupol will continue to operate with its own brand and identity, and a separate management team. Madikiza will oversee the co-ordination of the various retail mass businesses within the Group as well as make sure they share intellectual property, best practice and work collectively to maximise Sanlam’s position in the market.
Assupol was established in 1913 as a burial society for members of the then- South African Police. The company has grown into a fully-fledged life insurer. Assupol has become a household name in South Africa, synonymous with high- quality service and affordable products tailored for focused markets. The company provides funeral, life, savings and retirement products and services to South Africans from every walk of life.
For its latest financial year ending 30 June 2023, Assupol reported an embedded value of over N$7 billion, gross insurance premium revenue of over N$5 billion, and a solvency cover ratio of 179%.
Sanlam Group CEO, Paul Hanratty, said: “The proposed acquisition will allow us to strengthen our fortress South Africa strategy, and signifies Sanlam’s commitment to further long-term investment in South Africa. It places Sanlam in a strong competitive position in the retail mass segment of the South African market, thereby embedding our commitment to South Africa. Given the envisaged synergies, we are confident it will deliver accretive value for all our stakeholders.” Assupol chairman Reuel Khoza commented: “Assupol has always been a stable company, generating great value for its shareholders and all its stakeholders. We believe this acquisition by Sanlam will bring even greater opportunities for growth and success. It will not only strengthen our position in the market, but also enhance our ability to provide exceptional value to our clients. We are excited about this new chapter, and look forward to the benefits it will bring to both our employees and clients.” The completion of the proposed transaction will be subject to suspensive conditions, including the necessary regulatory approvals.