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Friday, September 4, 2015 - 02:16
Credit to Santam

Mutual & Federal recently advised that it would acquire Santam’s 33.6% stake in the Credit Guarantee Insurance Corporation of Africa Ltd (CGIC). The transaction should be completed in the second half of 2015 and cost about R600m. M&F will then own 86% of the company. Other remaining shareholders are the Industrial Development Corporation of SA and Munich Reinsurance.

The deal is a “win-win for CGIC and Mutual & Federal,” says Raimund Snyders, the company’s CEO. “As the regulatory and competitive environment increases in complexity, this acquisition puts us in firm control of a strategic investment asset, which we can now drive purposefully within the Old Mutual Emerging Markets portfolio of businesses to realise its full potential.”
According to Snyders, whereas trade credit insurance is well developed in South Africa, this is not the case elsewhere on the African continent. “This transaction is an opportunity for us to develop this market in the rest of the continent,” he explains.
Charles Nortje, CGIC’s Managing Director comments, “The real benefit to us is to have a single controlling shareholder, especially one as financially sound as Old Mutual. This will improve security for our policyholders and allow our staff members greater opportunities to grow their careers within the broader Old Mutual Group.”

Note
Credit Guarantee was registered in 1956 and commenced trading in 1958. As at 31st December 2014 total assets stood at R1 947m. Total shareholders’ equity was R724,4m.

Copyright © Insurance Times and Investments® Vol:28.9 1st September, 2015
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