SOUTH African insurance giant Sanlam has muscled its way into leading local life assurance company, First Mutual Ltd, which has diverse interests in the financial and property sectors, it eme
rged late yesterday.
Market sources said Sanlam, South Africa’s second-largest life assurer, has been buying its way into First Mutual, whose major shareholders were Capital Alliance and Trust Holdings, since September 23.
This move is seen as part of vigorous efforts by South Africa – the largest economy in Africa – to expand its economic influence in Zimbabwe and the continent.
Zimbabwe is South Africa’s largest trading partner. South Africa has interests largely in mining, manufacturing and agriculture in the country. South African-owned mining houses control local platinum and gold production.
Zimplats, owned by Implats, and Metallon Gold, owned by South African tycoon Mzi Khumalo, as well as Anglo Platinum, which is developing Unki platinum project, are some of the large South African conglomerates operating in Zimbabwe. Old Mutual is another.
Natural resource giant Anglo American, as well as Mmakau and Shaft Sinkers South Africa, which recently took over Eureka Gold mine, reopened on Monday, are also prominent players.
South African banking groups Absa and Standard Bank control Jewel Bank and Stanbic respectively.
South African firms are also expanding into Mozambique, Ghana, Nigeria, Uganda, Zambia and the Democratic Republic of Congo, among other places.
Records show that South Africa’s economy is 24 times bigger than all the Sadc economies combined. Its economic engine, Gauteng province, is eight times bigger than regional economies.
Durban, the capital of KwaZulu/Natal province, has an economy almost the same size as that of Zimbabwe, making the latter slightly above 2% of the South African economy.
Sources said Sanlam – listed on the JSE Securities Exchange and Namibian Stock Exchange – has been leveraging its way into First Mutual using local stockbroking firm, New Africa Securities, via New Africa Nominees. Sanlam, established in 1918, on December 31 2004 had a R350 billion asset base.
Documents show a trail of transactions indicating that New Africa bought New Africa Nominees large volumes of shares between September 23 and Wednesday this week.
First Mutual group CEO Douglas Hoto said he was not aware Sanlam had bought into his company.
“I’m not aware a South African investor has bought into our company,” he said. “I only know of 581 million shares traded for about $105 billion at an average share price of $180.”
It was not possible to get a comment from either New Africa or Sanlam last night.
Documents show New Africa bought First Mutual shares amounting to 892 million at a cost of more than $177 billion, giving New Africa Nominees a 25% stake. The ZSE’s threshold for a takeover is 31%. The shares went for a weighted average price of $198,54.
“New Africa Securities bought 892 019 349 shares for $177 103 841 150. It first bought 350 000 shares on September 23 for $35 million and then went all the way until Wednesday,” a source said.
“The smallest number of shares bought was 101 000 for $9 999 000 on October 4 and the largest was 590 517 186 shares for $118 103 437 200 on October 21.”