SOUTH AFRICA – Financial services firm Sanlam, is selling its 100 percent shareholding in subsidiary Sanlam Life & Pensions UK to Chesnara, a pensions and protection consolidator for US$54 million (R764 million).

Sanlam said the sale was in line with its strategy to simplify its UK operations and reallocate capital to Africa and other selected emerging markets.

The transaction is subject to regulatory approvals in South Africa and the UK and is expected to be completed in early 2022.

Chesnara said Sanlam Life & Pensions UK would add US$4 billion of assets under administration through 80,000 policies across 60,000 clients.

It added that Sanlam Life & Pensions (SLP) insurance and savings products were a strong fit for its strategy and operating model.

Chesnara said the deal was attractive for its shareholders and “supports the longer-term sustainability of the progressive Chesnara dividend strategy”.

The acquired business will be integrated into Chesnara’s UK platform Countrywide Assured and will follow its business model as a focused, closed-book consolidator.

SLP will retain a commercial relationship with Sanlam Investments UK for investment management.

John Deane, chief executive of Chesnara, said in a London Stock Exchange statement on 13 October: “We are delighted to announce this transaction which will expand the scale of our UK operations and deliver potential for material value creation for Chesnara. The expected incremental cash generation from SLP will enhance the sustainability of our progressive dividend strategy.”

“SLP is well aligned to Chesnara’s acquisition strategy and will be integrated with our existing UK operations. We look forward to welcoming SLP’s customers and staff to the Chesnara group and continuing to work with Sanlam on the management of SLP assets.”

“We believe that the market prospects for further acquisitions across our target markets remain positive and we continue to be confident in our ability to finance and execute such transactions on attractive terms for both vendors and our shareholders,” he added.

Jonathan Polin, Chief Executive of Sanlam UK, added that: “This deal is a testament to the strength and quality of SLP and its long-standing track record of excellent client service. I would like to thank all my colleagues there for their unstinting efforts. Chesnara is a highly respected and established life insurance and pensions consolidator, and I am confident that the business will flourish under its new ownership for the benefit of all its key stakeholders, including policyholders.”

Chesnara group comprises closed consolidation businesses in the UK and the Netherlands.

In addition, it has a separate Dutch new business operation and an open business in Sweden.

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