Sanlam acquires employee benefits consultancy arm of Absa

In a deal involving two major players ion the South African financial services market, Sanlam Life Insurance has acquired the Absa Consultants Actuarial (ACA) subsidiary of Absa Financial Services. The deal has an estimated value of R285 million.

Absa Banking and Financial Services is a subsidiary of the Barclays Africa Group, which offers a range of financial services in the fields of retail, business, corporate and investment banking, and wealth management. Within Absa, its ACA subsidiary handles the consulting offerings it provides to asset, actuarial, health and benefit, and retirement funds. The division is also home to the employee benefits offering in its entirety. ACA has a substantial amount of business under its belt, currently holding 119 retirement funds, nearly 340,000 members (active and inactive), and R84 billion in assets under administration.

In a move worth R285 million, Sanlam Life insurance has acquired 100% of the issued share capital of the ACA division of Absa. Also a professional services firm, Sanlam has been active in business and management consulting, life insurance, wealth creation, and protection in South Africa, across the continent, and even in Asia for nearly a century now. The acquisition comes as an attempt to give the Sanlam Employee Benefits (SEB) division greater reach in a market where they currently find that opportunities for expansion are scarce.

The transaction is hoped to be completed by the end of this year, subject to a number of conditions being fulfilled, including the necessary regulatory approvals as well as approval from the Competition Tribunal. Meanwhile, professionals at both consulting firms are hoping to complete the transaction with minimal disruption.

ACA employees will remain with the firm after the transaction, and SEB will play the role of a shareholder, providing support where required and lending overall credibility in the market. Moreover, ACA will continue to fulfill its contractual obligations, both prior to as well as after the deal, thereby ensuring minimal disruption and maintenance of overall quality.

Commenting on the deal, the Chief Executive of SEB, Dawie de Villiers said, “Scale is fundamentally important in the employee benefits industry to ensure a sustainable business model. In this regard the potential transaction positions us very well to further expand our product offering and service levels to clients and intermediaries.”