- Standard Bank has made an offer to buy out all shareholders in Liberty, which will hike its stake in the life insurance and investment business from 54% to 100%.
- While the companies already cross-sell banking and insurance products to their clients, Standard Bank wants to bring the businesses closer together.
- It also sees "capital efficiencies" in having Liberty as a wholly-owned subsidiary.
Standard Bank, which already has a 54% stake in Liberty Holdings, has announced an offer to buy out all its shareholders.
It wants to own 100% of Liberty, which will result in the company being delisted from the JSE and becoming a wholly-owned Standard Bank subsidiary.
Liberty shareholders are offered R25.50 in cash per share, together with 0.5 Standard Bank shares per Liberty share held. The offer is almost 33% higher than Wednesday’s share price.
In a statement, Standard Bank said that it has long enjoyed a strategic relationship with Liberty, thanks to a "highly successful and valuable bancassurance arrangement". It now wants to offer "an increasingly wide range of financial and associated services".
Liberty offers life insurance, asset management, investment, and health products to more than 3 million clients across Africa.
Standard Bank Group CEO Sim Tshabalala said: "The integration of Liberty into Standard Bank Group enhances our ability to meet our clients’ financial needs, making possible holistic advice and competitive solutions for them, especially during major transition points in their lives".
"This transaction creates significant opportunities for capital efficiencies and to grow the united group by providing a fully integrated set of client offerings throughout SBG’s operations across Africa," he said.
'We are creating a more united group that will bring our banking, insurance and asset management businesses much closer together to create something really special. This will be a whole that will be much greater than the sum of its parts".
The takeover is subject to approval of Liberty’s minority shareholders, as well as from financial authorities, including the Reserve Bank and the Competition Commission.
Following these approvals, the transaction may be finalised by the first quarter of 2022.
"We expect that the strong alignment of Standard Bank Group and Liberty’s purposes and goals should allow for an accelerated and seamless integration of the businesses. Until that point, the entities will function as two separate entities and operate on a business-as-usual basis, offering client service with minimal disruption," the bank said in a statement.