Johannesburg - Sanlam Life Insurance Limited (“Sanlam Life”) today announced that it has entered into agreements to acquire 100% of the issued share capital of Absa Consultants and Actuaries Proprietary Limited (“ACA”) from Absa Financial Services Limited for a consideration of R285 million.
The giant life insurer said the transaction is subject to certain conditions precedent, including obtaining the necessary regulatory approvals which includes the approval of the Competition Tribunal.
ACA houses the entire employee benefits offering of the Absa Group and provides consulting (Asset, Actuarial, Health and Benefit) and administration to retirement funds in the South African retirement fund market. The company has a substantial book of stand-alone funds as well as a commercial umbrella fund and has in total 119 retirement funds with 339 614 members, both active and inactive, and assets of approximately R84 billion under administration.
According to the Chief Executive of SEB, Dawie de Villiers, the transaction will provide SEB with further scale in a market where the opportunities to exponentially grow the administration and consulting parts of the business are limited. “We are excited about the opportunities created by the potential transaction as it is a natural fit for our existing employee benefits administration and consulting businesses with real benefits to our clients and those of ACA.”
Adds de Villiers, “Scale is fundamentally important in the employee benefits industry to ensure a sustainable business model. In this regard the potential transaction positions us very well to 11 further expand our product offering and service levels to clients and intermediaries.”
Marcel de Klerk, Managing Executive for Fiduciary Services: Absa Financial Services, says while ACA is performing well, it will benefit more from operating in the SEB environment where the core focus is employee benefits.
“The employees of ACA will remain employed by ACA post the transaction. We believe Sanlam Life will be a suitable shareholder of ACA and will be capable of providing support where necessary due to its significant operations in both the private and umbrella fund markets as well as its credibility in the market place,” he says.
The transaction is expected to be concluded by the end of 2017 following regulatory approval and the fulfilment of the conditions precedent. “ACA will continue to fulfill its contractual obligations to its clients as normal prior to and after the transaction is concluded. We therefore do not foresee a disruption in services or the quality of service that our clients have come to expect,” says De Klerk.