Japanese insurer Tokio Marine has agreed to acquire a 22.5% stake in South African peers Hollard Holdings and Hollard International in a cash deal worth around ZAR5bn ($328m).
Hollard Holdings operates in South Africa, while Hollard International has presence in Namibia, Botswana, Mozambique, Ghana, Lesotho, and Zambia.
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As at 30 June 2017, Hollard Holdings’ paid up capital was JPY12.8bn ($115.4m) and Hollard International’s paid up capital was JPY3.5bn ($31.5m). The two South African firms offer both life as well as non-life insurance services.
The latest deal builds on the Japanese insurer’s existing partnership with Hollard.
Commenting on the deal, Tokio Marine said: “The insurance market in Sub-Saharan African Countries is expected to significantly grow and therefore contribute to geographical diversification in the medium and long term; however, given Tokio Marine’s limited presence and experience in the local market, we see it more prudent to explore the market through partnership with a local player rather than greenfield investment or 100% acquisition.
“Through the transaction, Tokio Marine will be able to acquire a precious foothold in full-scale expansion to Sub-Saharan African market.”
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By GlobalDataThe transaction is expected to close in the end of this year or early next year, subject to regulatory nod. The deal will be financed using Tokio Marine’s existing liquidity.
