South African billionaire Patrice Motsepe-linked Sanlam finalizes UK divestment

Sanlam, a South African financial services group linked to South African billionaire Patrice Motsepe, has completed its divestment from three of its UK-based businesses following regulatory approvals from key South African and UK authorities.

Motsepe owns a minority stake in Sanlam, Africa’s largest insurer, through his financial firm Ubuntu-Botho Investments (UBI), which he founded in 2004. UBI owns a 14.27-percent stake in the insurance company, with 292,471,806 ordinary shares worth R18.9 billion ($1.2 billion).

The divestment of Sanlam’s three UK-based businesses — Sanlam Life and Pensions UK Limited, Sanlam Private Investments Limited, and Sanlam Wealth Planning Holdings UK Limited — is in line with the group’s strategic plan to refocus its broad-based insurance and financial services operations in Africa.

The purchasing party, Chesnera, a life and pension consolidator listed on the London Stock Exchange, completed the transactions for an aggregate net consideration of £153 million ($188.8 million) after transaction costs

According to Sanlam’s board of directors, the transaction was completed seven months after the divestment from Sanlam Life & Pensions UK Limited and after all regulatory approvals in South Africa and the UK were obtained.

According to experts, the strategic divestment of Sanlam’s three UK-based operations is consistent with the group’s strategy to simplify its UK operations and reallocate capital to Africa and other selected emerging markets.

Sanlam announced six days ago plans to create the largest pan-African insurance player through a joint structure arrangement with Allianz, one of the world’s leading insurers and asset managers, in order to increase life and general insurance penetration, accelerate product innovation, and drive financial inclusion in high-growth African markets.

Sanlam and Allianz’s joint venture agreement will combine operations in 29 African countries, excluding South Africa.

The new entity will leverage Sanlam and Allianz’s strengths to unlock synergies and provide customers with best-in-class, innovative insurance solutions and technical excellence. It is expected to have a combined total group equity value in excess of R33 billion ($2.1 billion).