Sanlam acquires 25% stake in unit that owns TymeBank

Following this announcement, Sanlam’s Life unit will acquire the stake in African Rainbow Capital Financial Services Holdings, which controls African Rainbow Capital Investments’ holdings in TymeBank, AI Fund, CrossFin Holdings, and Ooba. The deal was valued at USD 218 million (ZAR 3.9 billion), according to a regulatory filing.

In addition, the financial institution will continue to focus on meeting the needs, preferences, and demands of clients and customers in an ever-evolving market, while prioritising the process of remaining compliant with the regulatory requirements and laws of the industry. 

More information on the acquisition

Sanlam is expected to pay USD 134 million (ZAP 2.4 billion) in cash, while also swapping its 25% shareholding in the African Rainbow Capital Financial Services Investments, for an equivalent value of shares in the investment holding company. TymeBank, which is also backed by China’s Tencent Holdings, is also valued at close to USD 1 billion. 

The transaction will also add value for shareholders as Sanlam is set to swap its current investment for a higher-returning one at a reasonable price. At the same time, Sanlam is expected to leverage TymeBank’s distribution network in order to sell insurance products to South Africa’s mass market. 

According to Daily Maverick, Sanlam extended its slide for a second day on Monday, which will shed as much as 4.1% African Rainbow Capital Investments climbed as much as 9.2%. The 25% stake will be treated as an investment in an associate, according to the comment made by Sanlam in a regulatory filing on the same day. 

In addition, the proposed deal represents an important extension of Sanlam’s existing interest in Africa Rainbow Capital Financial Services Investments, while the insurer will continue to explore ways in order to collaborate strategically with the holding firm and its portfolio investments.