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Momentum Metropolitan [JSE:MTM] on Friday announced the completion of its acquisition of Alexander Forbes' [JSE:AFH] short term insurance business, AFI.
The announcement came in the form of a statement from Momentum as well as a shareholder notice and is the culmination of a process that was first announced in July of 2019.
At the time, the acquisition was proposed at R1.938bn, covering 100% of the shares of AFI, which supports the business and its trademarks.
Momentum Metropolitan CEO Hillie Meyer said its portfolio of businesses already had substantial market share in the life insurance, investments, corporate and health products and the acquisition strengthened those synergies.
"This transaction more than doubles our client base to 150 000 policyholders and positions the combined short-term insurance business of Guardrisk, Momentum Short-term Insurance and AFI within the top three players in the short-term insurance market in South Africa," said Meyer.
The shareholder notice said the company aimed to apply the net proceeds after tax to partially repay its revolving credit facility and complete the implementation of a proposed repurchase of Alexander Forbes shares.
"The sale proceeds of R2.0038bn will be received by a subsidiary of the company, 90% of which is attributable to Alexander Forbes after minority shareholders' interests," the shareholder notice said.
Herman Schoeman, CEO of Momentum Metropolitan's non-life insurance portfolio, said the acquisition complemented Momentum's customer value proposition.
Alexander Forbes CEO Dawie de Villiers said clients would continue to receive the premium benefits and service offering that they have enjoyed with Alexander Forbes Insurance.
The statement said the integration of the two businesses will be realised in several steps involving integrating operations and consolidating product offerings, which once concluded, will trade under the Momentum brand, using one insurance licence.
