Africa’s largest insurer Sanlam Limited has failed in its attempt to increase its stake in Saham Assurance Maroc, a Morocco-based insurance company led by Moroccan billionaire Said Alj.
A statement by the South Africa-based insurer on Jan. 3 confirmed the decision, revealing that the group had backed down from its ambitious pan-African expansion drive after it failed to meet the conditions required to increase its majority stake in the Moroccan insurer.
The acquisition of an additional 22.8-percent stake in Saham, which failed to materialize, was a strategic attempt by Sanlam to enhance its growth potential and deepen its direct presence in North and Francophone West Africa.
Sanlam said the R2-billion ($220.78 million) share-purchase deal, which would have increased its shareholding in Saham to 84.5 percent, had “lapsed” due to its failure to meet key conditions. As a result, it will continue to hold its 61.7-percent stake in the property and casualty insurer.
The conditions included receiving the requisite approvals from the relevant regulatory authorities in South Africa and Morocco.
As part of the transaction, as the seller of the additional shareholding, Saham Holdings would have had to reinvest 50 percent of the R2-billion ($220.78 million) consideration to acquire shares in Sanlam at the prevailing share price and hold onto those shares for a minimum of two years.
Saham would also have had to provide Sanlam Group with strategic advice on matters related to its activities in Morocco.
Despite making a U-turn from the deal, Sanlam still remains Africa’s largest insurer, boasting an active presence in 44 countries. The group has been able to consolidate its position in the African insurance space since 2018 when it spent $1.1 billion to acquire Saham Finances.
In the first six months of 2021, Saham posted MAD384.1 million ($42.4 million) in profit, driven by an 8.1-percent growth in profit.
Compared to last year’s figures, its mid-year profit grew by 469.4 percent from a MAD104-million ($11.48 million) loss in the first half of 2020 to a profit of MAD384.1 million ($42.4 million) in the first half of 2021.