FirstRand sells off Outsurance
Johannesburg - FirstRand [JSE:FSR] said on Wednesday that it has agreed to sell its 45% stake in short-term insurer Outsurance to RMB Holdings [JSE:RMH] for R3.75bn.
FirstRand chief operating officer Johan Burger said the transaction presented the perfect opportunity to unlock value for FirstRand shareholders.
"Outsurance was a joint creation between FirstRand and management in 1998 and is a good example of FirstRand's long-term strategy to create shareholder value through the start up of completely new businesses," said Burger.
"Given the structure of our shareholding, we had limited liquidity options so therefore this deal provides us with the perfect opportunity to realise the significant value that has been created over the past 12 years," he said.
"Outsurance is a fantastic business but is a non-strategic asset, in that it does not sell directly to FirstRand's banking clients.
"Following the disposal of our stake, we will still have a number of integrated insurance operations within the group and we continue to see the sale of insurance products to our banking customers as a significant area of growth."