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South African billionaire Patrice Motsepe’s African Rainbow Capital (ARC) Investments and the financial services group Sanlam are in talks to acquire all or part of Absa Group’s asset management business.
Absa Group is South Africa’s third-largest lender and one of Africa’s largest diversified financial services groups, operating in 12 countries across the continent.
The combination of Absa Group’s asset management business and the Sanlam-owned equivalent would make one of the country’s largest money managers, behind the state-owned Public Investment Corp, Bloomberg reported.
However, insiders with information on the potential deal say a decision has yet to be reached and an agreement may not be concluded.
Absa Group recently announced the decision to unwind its $6-billion money-market mutual fund, citing risks to the bank as its clients believed its investments held the same degree of safety as cash kept in a savings account.
The move fueled speculation that Absa Group may actually be looking for a buyer, as it gave investors until July 1 to withdraw funds with the option of moving money into deposits or other financial products.
It is important to note that Sanlam’s interest in Absa Group’s asset management business is a strategic move to cement its position in the financial services industry in Africa, as the insurer has a presence in 33 countries across the continent.
Sanlam this month completed the acquisition of an additional 22.8-percent stake in the Morocco-based Saham Assurance Maroc for $137.1 million.
The deal increased the company’s stake in the Moroccan insurance company from 61.7 to 84.5 percent. The move comes after South Africa’s largest insurer stated that it will look to accelerate growth elsewhere on the continent as challenging market conditions at home drag on growth.
Earlier, in 2020, Sanlam acquired the remaining stake in the Nigerian insurance business FBN Insurance from its partner, FBN Holdings.
The deal leaves the company with full ownership of FBN Insurance Limited and its subsidiary, FBN General Insurance.
