Sanlam, South Africa’s biggest insurer by market value, is buying smaller rival Assupol Life for R6.5-billion to help cement its footprint at home.
The proposed transaction will see the 110-year-old Assupol become part of Sanlam’s insurance empire, boosting the latter’s offering when combined with Sanlam Sky, Safrican and a Capitec joint venture that’s set to close at the end of October.
The purchase “will allow us to strengthen our fortress South Africa strategy” Sanlam Chief Executive Officer Paul Hanratty said in a statement Friday. The transaction is subject to regulatory approvals.
Sanlam operates in 31 countries but gets about 75% of its revenue from South Africa. Assupol, which provides funeral, life, savings and retirement products and services, will continue to operate with its own brand and identity under a separate management team.
The acquisition will be funded by Sanlam Life Insurance’s cash resources, according to the statement.