Barclays Africa to acquire a controlling interest in First Assurance in Kenya

Barclays Africa Group Limited (‘Barclays Africa’ or ‘the Group’) has reached agreement to acquire approximately 63.3% of First Assurance Company Limited (‘First Assurance’) in Kenya for a net consideration of KES2 841 million (c. ZAR373.7 million), which includes a capital injection of KES722 million (c. ZAR94.9 million). Completion of the transaction remains subject to regulatory approvals in South Africa, Kenya and Tanzania and other conditions customary for a transaction of this nature.

First Assurance is the 10th largest general insurer in Kenya and also offers general insurance in Tanzania and life insurance in Kenya. First Assurance has over 50 000 customer policies in force and employs 132 people in Kenya and Tanzania. In 2014, First Assurance reported a profit after tax of KES518 million (c. ZAR68.1 million) and total equity of KES2 162 million (c. ZAR284.4 million), which excludes the capital injection planned as part of the transaction.

The announcement of Barclays Africa’s planned acquisition of First Insurance is in line with its stated strategy of capturing the growth opportunity for its Wealth, Investment Management and Insurance business in East Africa. It also comes shortly after the Group’s launch of Barclays Life Assurance Kenya (‘BLAK’) on the 30th of April this year. The intention is that First Assurance’s life operations in Kenya will be combined with BLAK once the transaction is completed. The combination of First Assurance and BLAK will give Barclays Africa a general and life insurance presence in Kenya as well as a general insurance presence in Tanzania.

Willie Lategan, Chief Executive of Wealth, Investment Management and Insurance at Barclays Africa says: “Barclays Africa wants to extend its customer offering to more people across the continent while expanding the range of financial products and services on offer. The planned acquisition of First Assurance is a good strategic fit for our business, provides us with a strong platform to expand our bancassurance offering in East Africa, and complements the Group’s financial target of increasing our revenues from Africa outside of South Africa to between 20% and 25%.”

Stephen Githiga, Managing Director of First Assurance, says: “As a majority shareholder Barclays Africa will bring a strong brand for us to leverage, a vast distribution network for our bancassurance platform as well as technical support for our products and services. Existing First Assurance customers will benefit from access to new products and services as a result of the acquisition.”