Momentum repositions its group-benefit businesses

Momentum Group Limited (“Momentum”) and the Mineworkers Investment Company (“MIC”) are pleased to announce Momentum’s acquisition of MIC’s 30% equity stake in Lekana Employee Benefit Solutions (“Lekana”). Momentum owned 70% of Lekana prior to the acquisition.

The transaction allows Momentum to position its employee-benefit businesses to take advantage of the evolving dynamics in the retirement-funding industry. Momentum believes that economies of scale and operational efficiency will be critically important to continue to be a successful player in the employee-benefits market. It has therefore created a single business unit to pursue the opportunities in this market.

The enlarged group-benefit business unit will be ideally positioned to provide first-class advice, service and product solutions to Momentum’s (and Lekana’s) clients. The business will benefit from economies of scale (derived from an integrated back office) and will be an attractive employer to talented personnel. According to Morris Mthombeni, chief executive of Momentum’s group-business division: “The concerted focus on our employee-benefits businesses enables Momentum to play a constructive role in (and benefit from) the government discussions on social security reform.”

Lekana was created in 2003 (i.e. before the FirstRand Limited BEE transaction was concluded). At the time of Lekana’s creation, Momentum and MIC saw an opportunity to create an exciting, empowered new player in the retirement-funding market. MIC chief executive, Paul Nkuna, says that: “MIC is proud of its contribution, as a shareholder in Lekana, in establishing Lekana as a significant player in the employee-benefits market.” MIC provided empowerment credentials to Lekana at a time when BEE ownership transactions were not in vogue in the insurance industry.

Nkuna added that: “MIC remains a shareholder of FirstRand Limited and will thus continue to play an active role through its representation on the boards of FirstRand, Lekana and Momentum.” MIC and Momentum are proud of their long and fruitful relationship in Lekana and look forward to continued future engagement.