JOHANNESBURG- South Africa's Sanlam SLMJ.J said on Monday it would buy an additional 22.8% stake in Moroccan insurer SAHAM Assurance for 1.98 billion rand ($137.09 million).
The move comes after Sanlam, South Africa's largest insurer, said it would look to accelerate growth elsewhere on the continent as tough market conditions at home drag on growth.
The transaction would increase its direct and indirect stake in SAHAM Assurance, whose products include home, health and car cover, to 84.5%, with the price payable in cash and funded using Sanlam's debt facilities, it said.
The benefits of the transaction included "enabling Sanlam... to deepen its direct presence in north and francophone west Africa" and to explore other partnerships to support growth in the region, it continued.
SAHAM Assurance, listed in Casablanca, was already 61.7% owned by San JV, a special purpose vehicle majority held by a Sanlam emerging markets subsidiary and its short-term insurance subsidiary Santam.
The insurer will purchase the stock, priced at 2,101 rand per share, from its Moroccan partner and business mogul Said Alj and two entities related to him, it said.
As part of the transaction, the sellers had agreed to reinvest 50% of the proceeds to acquire shares in Sanlam on the open market in the next few months, which would be held for a minimum of two years, Sanlam said.
Sanam, a Moroccan holding company with stakes in industries including finance and commercial real estate and chaired by Alj, would continue to provide Sanlam with economic and commercial advice on its local activities in the coming years, Sanlam said.
Sanlam shares were down 0.55% at 0937 GMT.
($1 = 14.4434 rand)
(Reporting by Emma Rumney Editing by Promit Mukherjee; Editing by Kirsten Donovan) ((Emma.Rumney@thomsonreuters.com; +27115952832;))