Standard Bank to buy remaining insurer Liberty Holdings stake for US$729m

SOUTH AFRICAStandard Bank, Africa’s largest bank by assets has announced plans to acquire 100% ownership in financial services firm, Liberty Holdings, an acquisition that is expected to expand the bank’s network across the continent.

The top bank already owns 54% of Liberty Holdings but wants to purchase 100% ownership of the company at a price of US$729 million.

“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,” said Standard Bank Group CEO Sim Tshabalala.

Standard Bank has subsidiaries in 20 African countries and over 50,000 employees worldwide.

Similarly, Liberty Holdings is among the biggest insurance companies in Africa, with a presence in 12 African nations.

The South African company owns a 57% stake in Liberty Kenya Holdings and is in the process of acquiring additional shares in the company.

The merger between Standard Bank and Liberty Holdings is subject to approval from shareholders and relevant authorities.

According to sources familiar with the matter, the deal is expected to be finalized by the end of the first quarter of 2022.

In a public statement, Standard Bank said, “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.”

The two financial institutions will continue to operate as separate entities until their goals and objectives are fully aligned.

“This will be a whole that will be much greater than the sum of its parts,” Tshabalala said.

He said the deal would also bring capital efficiencies and growth opportunities, with insurance penetration in African markets at just 17% or lower.

“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”

Sim Tshabalala – CEO, Standard Bank Group

The two groups said the merger would give them superior scale and more ability to capitalize on one another’s customer bases, complementary products and technology.

Liberty Chief Executive David Munro said that the deal would also give Liberty the chance to tap back into markets elsewhere on the continent, something the company has attempted previously.

If the deal goes ahead, Liberty shareholders, who hold some 119 million shares, will get 0.5 Standard Bank shares and ZAR25.5 (US$1.76) in cash for each Liberty share, worth ZAR89.46 (6.19) per share in total.

That represents a 32.6% premium to Liberty’s closing price on July 14, the companies said.

The decision has been approved by the boards of Standard Bank Group and Liberty and was also supported by a preliminary independent fair and reasonable assessment which has been undertaken by an independent expert, Standard Bank said.

The transaction will require the approval of Liberty’s minority shareholders as well as regulatory approval across numerous jurisdictions, including the SARB Prudential Authority, the Johannesburg Stock Exchange, the Competition Commission, and the Takeover Regulation Panel in South Africa.

Should Liberty’s minority shareholders approve the transaction, it is expected to be finalized by the first quarter of 2022.

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