South Africa’s biggest general insurer could leave JSE after Sanlam’s R16bn move

Cape Town – South African financial services group Sanlam has moved to take full control of Santam in a deal that could see the country’s largest general insurer leave the Johannesburg Stock Exchange after more than six decades.

Sanlam, which already owns an effective 62.7% stake in Santam, has offered R505 per share to acquire the remaining shares held by minority shareholders.

The offer represents a 26.6% premium to Santam’s closing share price of R399 on 2 October, as well as premiums of 25% and 28.6% to its 30-day and 90-day volume-weighted average prices respectively, according to BusinessTech.

Sanlam and Santam signed an implementation agreement on Monday, 5 October, with the proposed transaction structured as a scheme of arrangement.

“This is the natural next step in a partnership that has developed over more than a century,” Sanlam CEO Paul Hanratty said, according to Business Insider Africa.

The companies said the transaction would consolidate Sanlam’s ownership of Santam and simplify the broader group structure.

“The proposed transaction represents a natural next step in this relationship by fully consolidating Sanlam’s ownership of Santam,” the companies said in their joint announcement, as reported by Daily Investor.

Santam could leave the JSE

If the deal is approved and implemented, Santam will be delisted from the JSE, Namibian Stock Exchange and A2X, bringing an end to its separate public-market listing.

Santam has been listed on the JSE since 1964, meaning the transaction would end a 62-year chapter for the insurer.

Moneyweb reported that Santam’s independent board has unanimously backed the transaction and will recommend that eligible shareholders vote in favour of the scheme.

The proposed buyout of the remaining 37.3% stake is expected to cost Sanlam about R16 billion, according to BusinessDay.

The transaction remains subject to shareholder and regulatory approvals. The companies’ official SENS announcement states that the scheme requires the requisite shareholder approval and other conditions before implementation. The combined offer circular is expected to be issued in November.

For minority shareholders, the deal provides an opportunity to exit their investment at a substantial premium, while Sanlam would gain complete control of a business it has already dominated for decades.

Santam’s shares surged after the announcement, rising as much as 22% during Monday’s trading session before closing at about R475, according to Moneyweb.

The proposed deal would therefore reunite the two businesses under one ownership structure while removing Santam as a separately listed company from South Africa’s stock market.