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Liberty Holdings expands in Kenya

4 December 2009

South African wealth manager Liberty Holdings is to bolster its African footprint when its assumes an approximately 57% controlling share of CfC Insurance Holdings, a leading Kenyan life, health and general insurance group consisting of CfC Life Assurance and The Heritage Insurance Company.

This follows the restructuring of the East African assets of Standard Bank, which controls Liberty Holdings through its 53.6% stake.

"Liberty has made clear its strategic intent to grow its business within Africa's important economies, leveraging off Standard Bank's presence, and specifically to develop a presence in East Africa," said Liberty Holdings CEO Bruce Hemphill in a statement this week.

"This transaction checks all three of those boxes and while the acquisition is small within the context of the overall group it provides a strategic platform which is expected to add significant value to shareholders into the future."

Potential for wealth products

Hemphill said that the company's intention was to enter markets that were benefitting from political and regulatory stability, where there is strong economic growth, and where there is potential for greater penetration on wealth products.

"A combination of these factors provides an ideal opportunity to build critical mass in the region," he explained.

CfC Life and Heritage are providers of life, health and short-term insurance products in both the Kenyan and Tanzanian markets.

"CfC is an ideal platform from which to achieve Liberty's growth objectives of establishing a leading position in the life, health, short term and asset management wealth pillars in East Africa," the statement read.

Acquisition benefits

Liberty expects the medium- to long- term benefits in acquiring control of the business to include:

  • As a separate listed entity with Liberty as an anchor shareholder, CfC will benefit from greater focus and the value available from having a strategic shareholder with significant insurance expertise and access to funds for growth;
  • CfC will be positioned to benefit from economies of scale, the extraction of synergies between the businesses and from greater capital efficiency, resulting in improved returns for all shareholders; and
  • the restructured businesses will provide Liberty with a sound platform for organic and acquisitive growth in Kenya and elsewhere in the region.
"The acquisition provides us with the full range of wealth pillars and opens up further opportunities in East Africa, a region that is of strategic importance to Liberty," said Humphill.

SAinfo reporter

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