Sanlam Offers to Acquire Controlling Interest in AfroCentric

Sanlam Offers to Acquire Controlling Interest in AfroCentric

AfroCentric Investment’s board has received an offer letter from financial services business Sanlam, expressing its definite intention to buy a controlling stake in the JSE-listed investment holding company that is majorly owned by black people.

The insurance specialist has offered a purchase consideration of R6.00 per AfroCentric share, and AfroCentric shareholders have the option to receive the purchase consideration in cash or in Sanlam shares.

AfroCentric’s companies, notably the Medscheme medical scheme administration business and AfroCentric’s pharmacy enterprises, are held by ACT Healthcare Assets, which is currently held by Sanlam through Sanlam Life Insurance. In accordance with the agreement, Sanlam will exchange an equal (28.7%) investment in AfroCentric for its ownership of ACT Healthcare Assets.

The final shareholding will rely on the proportion of AfroCentric shareholders that accept Sanlam’s offer, according to Sanlam, should the transaction go through.

Sanlam stated that it plans to broaden its client pitch to offer a more comprehensive product portfolio, which will include medical assistance and health insurance.

“Through this transaction, Sanlam 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,” it said.

“AfroCentric is focused on delivering affordable medical aid and health insurance products which complements Sanlam’s purpose of enabling its clients to be financially secure and prosperous.”

Long-term, Sanlam stated, it will provide customized healthcare solutions and improve commercial visibility through more administration-level marketing and co-branding.

If this offer to shareholders is accepted, Sanlam is thrilled to welcome AfroCentric shareholders, management, and key stakeholders into the Sanlam Group, according to Sanlam Group CEO Paul Hanratty. With 3.8 million members, AfroCentric is a top provider of comprehensive and diverse healthcare.

“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.”

The offer is subject to conditions customary to a transaction of this nature, including approvals from the Competition Tribunal and Takeover Regulation Panel.