26th Jan 2015 13:31
LONDON (Alliance News) - Old Mutual PLC Monday said it has increased its stake in UAP Holdings Ltd, buying new shares for KES14.2 billion, equivalent to USD155.5 million, meaning it now owns 60.7% of the East and Central African financial services company.
The acquisition of a further 37.3% of UAP's shares comes just over two weeks since the Anglo-South African investment, savings, insurance and banking group took a 23.3% stake in the Kenya-based company.
Old Mutual's emerging markets business has allocated ZAR5 billion, about USD500 million, to invest in financial services operations in sub-Saharan Africa, a war chest that has seen it acquire Oceanic Life and Oceanic General Insurance in Nigeria, as well as Provident Life Assurance in Ghana and Faulu Microfinance Bank in Kenya. Last year, Old Mutual's banking subsidiary, Nedbank, exercised its rights to subscribe for a 20% shareholding in ETI to create a banking network of more than 2,000 branches, while it also took a 36.4% stake in Banco Unico in Mozambique.
"East Africa is a core growth market for Old Mutual and this transaction is a critical step in Old Mutual becoming an African financial services champion and further progress on our strategic agenda to transform the Group and improve its sustainable growth profile," Julian Roberts, chief executive, said in a statement.
According to Ralph Mupita, the chief executive of Old Mutual Emerging Markets, the deal will take the group's investment in the region to nearly USD300 million since 2012.
"Combining Old Mutual and the UAP businesses will provide us with the capability and scale to offer fully integrated financial services including life, healthcare, P&C [property and casualty] and banking products," Mupita said.
Old Mutual is buying the stake from The Abraaj Group, AfricInvest and Swedfund, which collectively hold the stake.
The deal requires approval from regulators, and Old Mutual wants an exemption from having to make a mandatory offer for the remainder of the shares in UAP.
Old Mutual's latest purchase is expected to complete within 2015.
Old Mutual shares were up 0.2% at 205.10 pence on Monday.
By Samuel Agini; [email protected]; @samuelagini
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