An agreement to integrate the investment management businesses of banking group Absa and insurance company Sanlam has been concluded.
In a statement on Thursday, Absa confirmed that the “suspensive conditions” that prolonged the conclusion of the transaction have been fulfilled, noting that the merger is effective from December 1.
The transaction entails that Absa has exchanged its investment management business, Absa Investments, for a stake in Sanlam Investment Holdings Proprietary Limited (SIH), a company established by Sanlam and Patrice Motsepe’s African Rainbow Capital.
Through this merger, the SIH is expected to have assets of the two financial sector giants under management, administration, and advice in excess of R1-trillion. Sanlam said this will boost the SIH’s position as one of the country’s largest black-owned asset managers.
“The transaction sees Absa exchanging its investment management business, Absa Investments, for a stake in SIH. Absa Investments comprises Absa Asset Management, Absa Alternative Asset Management, Absa Fund Managers and Absa Multi-Management,” Absa said in a statement on Thursday.
“The conclusion of the transaction significantly strengthens SIH’s offering through enhanced scale, broader distribution reach and a more holistic range of investment solutions. This further enhances SIH’s position as one of South Africa’s largest black-owned asset managers.”
Absa and SIH have also entered into a 10-year distribution agreement through which the expanded operations will make use of the distribution networks of both Sanlam and Absa to extend the market reach for SIH.
Absa group financial director, Jason Quinn, said: “We are delighted with the successful conclusion of the transaction, which delivers the scale, capabilities and transformation which we view as essential to achieving strong and sustainable growth.
“Absa remains committed to the investment management sector through its shareholding in the combined entity and a 10-year distribution agreement, which will help us to offer an enhanced customer value proposition by creating a deeper, broader range of investment solutions for our clients.”
Sanlam Investment Group CEO, Carl Roothman, has assured both Absa and Sanlam clients that the merger will serve their interests, adding that they will benefit through improved investment solutions.
“We are excited that the agreement to integrate the investment management businesses of Sanlam and Absa has been concluded. Sanlam and Absa clients will gain from the enhanced investment offering. This partnership will allow us to deliver investment solutions that sustain future generations,” Roothman said.
“Scale is critical in driving the product and service innovation required to meet clients’ financial goals. Combined capabilities, expertise and commitment to our clients will position us to be the preferred investment solutions provider in South Africa.
“Our promise is to serve our customers with pride and deliver world-class client experience and solutions.”
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