Tribunal approves Sanlam's intended acquisition of AfroCentric shareholding
Pretoria - The Competition Tribunal yesterday announced that it had unconditionally approved the proposed merger wherein Sanlam Ltd ("Sanlam") and Sanlam Life Insurance Ltd ("Sanlam Life") intend to acquire shareholding in AfroCentric. The Tribunal said in the post-merger, Sanlam will have sole control over the AfroCentric Group.
Sanlam (through Sanlam Life Insurance) currently holds 28.7% in ACT Healthcare Assets, which in turn holds AfroCentric’s businesses, including the Medscheme medical scheme administration business and AfroCentric’s pharmacy businesses. As part of the transaction, Sanlam will transfer its shareholding in ACT Healthcare Assets to AfroCentric in exchange for an equal (28.7%) shareholding in AfroCentric.
The approval means that Sanlam will now hold a majority of AfroCentric shares, with the final shareholding dependent on the percentage of AfroCentric shareholders that accept Sanlam’s offer. Late in 2022, Sanlam said it had offered a purchase consideration of R6 per AfroCentric share, and AfroCentric shareholders had the option to receive the purchase consideration in cash or in Sanlam shares.
The Sanlam Group provides, among other services, healthcare advisory or consulting services to individuals. It provides the following services to the AfroCentric Group:
- potential sales leads for individual healthcare advice;
- co-branding, white labelling and marketing of AfroCentric's healthcare products; and
- underwriting services for cell captive short-term insurance products.
The AfroCentric Group provides, among other services, healthcare advisory or consulting services to individuals. It provides the following services to the Sanlam Group:
- marketing services;
- potential sales leads for non-life insurance products; and
- corporate wellness services.
At the initial announcement in October 2022, Sanlam had said it intends to expand its client proposition to provide a more holistic product offering, including medical aid and health insurance. Through this transaction, it added, the Group will be able to integrate AfroCentric’s product offering into its ecosystem, while AfroCentric will gain increased access to the wide Sanlam distribution network. AfroCentric’s client base will also benefit from access to the overall Sanlam product offering and vice versa.
Sanlam's Group CEO, Mr Paul Hanratty had concluded by saying: “Sanlam is delighted to welcome AfroCentric shareholders, management and key stakeholders into the Sanlam Group if this offer to shareholders is accepted. AfroCentric is a leading diversified and integrated healthcare provider that provides services to 3.8 million members. They have an unwavering focus on providing excellent service at affordable price points to South African consumers, which makes them an attractive addition to Sanlam’s stable of offerings.”
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