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15 December 2015
AHA is a wholly owned subsidiary of AfroCentric Investment Corporation Limited (ACT). This transaction, Sanlam's largest transaction in South Africa since its acquisition of African Life in 2005, confirms Sanlam’s commitment to also pursue growth initiatives in South Africa whilst growing its presence in other emerging markets.
AHA owns 94.1% of AfroCentric Health Limited which has a 100% shareholding in Medscheme Holdings Limited, South Africa’s largest health risk management services provider and the third largest medical scheme administrator.
Medscheme also has a presence in some of the countries where Sanlam operates - Botswana, Namibia, Swaziland, Kenya and Mauritius. In addition, Medscheme has operations in Zimbabwe, where Sanlam Emerging Markets is in the process of completing the acquisition of a 40% shareholding in the Zimbabwean based insurance business of the Masawara Group.
Commenting on the partnership, Sanlam's Group Chief Executive, Ian Kirk, said the partnership with AHA would complement the Group’s retail offering in the South African and the rest of Africa market and positioned it well for the expected growth in the healthcare sector.
"A full basket offering of financial services has become a requisite for growth and increased success in the South African market. A strong medical scheme will enhance Sanlam’s offering, which does not currently have scale commensurate with the rest of its retail offering," he said.
Sanlam currently provides medical aid administration for a closed scheme, CAMAF, which has approximately 25 000 principal members.
"We are confident that Medscheme is a suitable partner with the necessary scale and management expertise to add value to our South African business and bring medical aid solutions to our clients. We also believe Medscheme's operations outside South Africa provide an excellent platform for further international expansion," Kirk said.
Sanlam's extensive local and international distribution network and suite of financial products combined with AHA’s medical administration capabilities and membership base will ensure that a joint pursuit and expansion of the parties' traditional activities will now be possible.
This will form part of an expanded administration and managed healthcare business model. Commenting on the transaction, ACT’s Dr Anna Mokgokong said: "This transaction offers us access to Sanlam's extensive distribution network as well as a suite of financial products. We expect the partnership to positively position the ACT Group for further growth."
ACT is a diversified investment holding company, controlled by a number of black empowerment shareholders, which inter alia include Community Investment Holdings, the AfroCentric Empowerment Trust and the South African Medical and Dental Practitioners.