South AfricaSanlam to buy out Santam
Sanlam plans to take full ownership of Santam, South Africa's largest short-term insurer, in a deal worth around R16bn. The move will see Santam delist from the JSE after 62 years.
Global Newsflix 2 min read
Sanlam Group CEO Paul Hanratty said the proposed transaction is a natural next step in the longstanding relationship between Sanlam and Santam, which spans more than a century.
Under the proposed deal, Sanlam will pay R505 a share to buy out the 37.3% of Santam it does not own, cementing its dominance of the local market.
Santam CEO Tavaziva Madzinga said the deal at this time made sense for both parties, providing shareholders with an attractive, cash-certain outcome at a meaningful premium.
The transaction aligns with Sanlam's Vision 2030 strategy of simplifying the group, deepening integration across its businesses, and allocating capital to opportunities that support long-term value creation, Hanratty said.
The deal comes as Sanlam gears up to launch an offensive on the banking sector with its partnership with GoTyme, where its insurance and investment capabilities will play a key role in offering consumers a full suite of financial services products.
Santam has thrived alongside Sanlam for over a century, and this proposal is a logical progression of that relationship, Madzinga said.
The transaction will give Santam full access to the scale, capital strength and diversified capabilities of the Sanlam group, Madzinga added.
Key facts
- Sanlam to pay R505 a share to buy out 37.3% of Santam
- Deal worth around R16bn
- Santam to delist from JSE after 62 years
- Transaction aligns with Sanlam's Vision 2030 strategy
Three perspectives
Neutral
The proposed transaction has been described as a natural next step in the relationship between Sanlam and Santam. The deal will provide Santam shareholders with a cash-certain outcome. Sanlam's plans will be closely watched by the market.
Positive
The deal is expected to strengthen Sanlam's role as a South African financial services champion. It will also provide Santam with full access to the scale and capital strength of the Sanlam group. This will enable Santam to deepen its investment in the franchise and expand its footprint across the continent.
Negative
The transaction may raise concerns about Sanlam's growing dominance of the local market. The delisting of Santam from the JSE may also be seen as a loss for the exchange. Some shareholders may be unhappy with the offer price.
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