American Insurance Group (AIG), the U.S.-based finance and insurance corporation, is poised to realize a substantial windfall of at least Ksh2 billion ($13.5 million) through the sale of its majority stake in AIG Kenya Insurance to NCBA Group, a prominent financial services conglomerate partially owned by the Kenyatta family.
This development follows NCBA Group’s recent announcement of its intent to engage in discussions with AIG Group in a move to own 100 percent of the issued share capital of the subsidiary. Although undisclosed, the deal’s financial terms have piqued the interest of industry observers.
As of the end of the last fiscal year, AIG held a 66.67-percent stake in AIG Kenya Insurance, making it the sole shareholder, according to disclosures made by the multinational corporation. The estimated value of this majority stake, based on NCBA’s valuation of its existing 33.33-percent ownership in the local insurer, stood at Ksh2 billion ($13.5 million) as of December 2022.
AIG Kenya Insurance Company Limited represents the fourth subsidiary of AIG Group on the African continent, following in the footsteps of AIG Egypt Insurance Company S.A.E and South Africa’s Johannesburg Insurance Holdings, including AIG Life South Africa and AIG South Africa Limited. Notably, NCBA Group has maintained a minority stake in this associate company for the past 18 years.
The move by the Kenyatta-affiliated group to enhance its holdings in AIG Kenya Insurance aligns with its broader strategy of consolidating its position in the East African insurance market. This decision comes on the heels of NCBA’s expansion into the border county of Migori, positioning itself strategically to tap into local traders and explore neighboring markets in Uganda and Tanzania.
NCBA Group, headquartered in Nairobi, operates as a non-operating holding company and has a vast network of subsidiaries across several African nations, including Tanzania, Rwanda, Uganda, and Cote d’Ivoire.
The leading Kenyan banking group, established in 2019 by the merger of NIC Bank Group and Commercial Bank of Africa Group, now has 109 branches in five countries — Kenya, Uganda, Tanzania, Rwanda, and Cote d’Ivoire — and is partially owned by some of Kenya’s richest families, Kenyatta, Merali, and Ndegwa families.
Through their late patriarch’s estate, the Kenyatta family maintains a significant 13.2-percent stake in NCBA Group, equivalent to 217,497,023 ordinary shares.
In addition to strengthening its operations within Kenya, NCBA Group has made noteworthy investments outside the country, consistent with its ambition to emerge as a prominent player in the East African region.