Sanlam, a leading financial services group, has overcome the last regulatory challenge in its R6.5 billion acquisition of Assupol, as it aims to solidify its position in South Africa and expand further across the continent and into India.
On Tuesday, the Competition Tribunal approved the merger with conditions, although specific details of these conditions have yet to be disclosed. This approval follows the Competition Commission’s recommendation two weeks prior, which advised the deal proceed with the stipulation of a three-year moratorium on retrenchments.
Once finalized, Assupol will join Sanlam’s retail mass cluster but will continue to operate under its own brand. Assupol, which reported gross insurance premium revenue exceeding R5 billion in June 2023, will be integrated into Sanlam’s broader portfolio.
The acquisition opportunity arose last year when Assupol’s majority shareholder Bidvest, holding 46% of the company, and the World Bank’s International Finance Corporation, with a 19.41% stake, decided to sell their shares. Both entities have been invested in Assupol for a decade.
Founded in 1913 as a burial society for South African Police members, Assupol has evolved into a comprehensive life insurance provider.
Sanlam CEO Paul Hanratty previously highlighted the synergies between Sanlam’s retail mass cluster and Assupol’s operations. The acquisition aligns with Sanlam’s strategy to fortify its position in South Africa and underscores its commitment to long-term investment in the region.
The deal is expected to enhance Sanlam’s competitive edge in South Africa’s retail mass segment. Additionally, Investec, a niche private banking and wealth management group, will benefit from a R1.7 billion cash injection as part of the Sanlam-Assupol transaction. Investec holds an indirect interest in Assupol through its share in Bud Group, formerly Investec Equity Partners. According to Investec’s 2024 annual report, the sale of Assupol is part of a strategy to exit its non-core South African investments and streamline its portfolio.
As of March 31, Investec held a 36.4% stake in Bud Group.
Sanlam, the largest non-banking financial institution in South Africa, has been actively pursuing growth through various acquisitions over the past three years. The group’s strategy focuses on expanding its dominance in the domestic market, growing its presence across the continent, and building a scalable non-banking financial institution in India.
In 2023, Sanlam acquired a 60% stake in health insurer AfroCentric, added Capital Legacy for wills and estate services, and completed the buyout of remaining shareholders in insurer BrightRock. Additionally, Sanlam and MultiChoice reached an agreement in June, where Sanlam acquired a 60% stake in MultiChoice’s insurance business, NMS Insurance Services (NMSIS). This deal also includes a commercial arrangement to extend insurance services to MultiChoice’s 21-million households across 50 African countries. Sanlam paid an upfront cash consideration of R1.2 billion, with a potential performance-based earn-out up to R1.5 billion contingent on the performance of NMSIS through December 31, 2026.
Sanlam has also combined its local investment management business with Absa, creating an asset manager with R1 trillion in assets. Furthermore, the group announced a joint venture, SanlamAllianz, with Allianz, Europe’s largest insurer, to pool their African businesses into a partnership valued at approximately R35 billion.
With a market value of around R182 billion on the JSE as of June, Sanlam has extended Hanratty’s tenure as CEO until December 2027, reflecting his role in the group’s significant expansion since he succeeded Ian Kirk four years ago. Hanratty, who joined Sanlam’s board in 2017 and became CEO in July 2020, has overseen a 34.6% increase in the group’s stock over the past three years.