Sanlam Life Insurance says it has entered into agreements to acquire 100% of the issued share capital of Absa Consultants and Actuaries from Absa Financial Services for a consideration of R285 million.
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.
It 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 (active and inactive) and assets of approximately R84 billion under administration.
Chief executive of SEB, Dawie de Villiers, said that 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.
Marcel de Klerk, managing executive for Fiduciary Services: Absa Financial Services, said 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 said.
The transaction is expected to be concluded by the end of 2017 following regulatory approval and the fulfilment of the conditions precedent.
The transaction is subject to certain conditions precedent including obtaining the necessary regulatory approvals (which includes the approval of the Competition Tribunal).