Cape Town – Insurer Sanlam [JSE:SLM] announced on Tuesday it would acquire a 30% stake in Morocco-based Saham Finances, as it seeks to expand its footprint in Africa.
According to Sanlam it would acquire the R5.3bn ($375m) stake from the Abraaj Group and the International Finance Corporation (IFC).
Saham Finances is one of Africa's largest insurers and operates in 26 countries.
It has a network of over 650 branches, a staff complement of more than 3 000 people and a consolidated turnover of over $1bn.
The transaction is set to expand Sanlam’s footprint across Africa to countries including Cote d’Ivoire, Gabon, Senegal, Cameroon, Morocco, Lebanon and Angola.
The deal comes as local insurers battle to sell insurance amid an economic downturn.
“We believe that Africa presents us with a unique, long-term growth opportunity,” Sanlam Chief Executive Ian Kirk said.
Kirk said the transaction aligned with the group’s diversification strategy and would enable it to access a diversified blend of new high-growth insurance markets in North and West Africa.
IFC Director Mouayed Makhlouf said in a joint statement the IFC is pleased to support the transaction, which "promotes cross-border South-South investments and partnerships across Africa".
Sanlam expects the transaction to be completed in the first quarter of 2016.
Sanlam shares closed down 0.52% at R62.76 on Tuesday.