Allianz finalizes Jubilee Acquisition
Allianz has finalized its acquisition of a 66% stake in Jubilee Insurance
Welcome to the Baobab Weekly where we bring you a succinct summary of key business news from East Africa.
This week, we cover Allianz’s acquisition of a 66% stake in Jubilee General Insurance, CMA’s approval of rights issues by Crown Paints and the IPO of MTN Rwanda.
Allianz acquires Jubilee
Allianz, one of the world’s leading insurers and asset managers becomes the majority shareholder in Jubilee General Insurance Limited in Kenya following the acquisition of a 66% stake in the company at a cost of Ksh 10.8 billion (~$100.93 million). This follows a 2020 agreement where Allianz agreed to acquire the majority shareholding in the short-term general insurance business operations of Jubilee Holdings Ltd in Kenya, Uganda, Tanzania, Burundi, and Mauritius. The new firm will be called Jubilee Allianz General Insurance Limited.
We strongly believe this to be a very beneficial acquisition as Jubille will benefit from Allianz’s global reach as Allianz benefits from Jubilee’s local presence. Market penetration for insurance products in East Africa is pretty low with 2.6% in Kenya and less than 1% percent in Uganda and Tanzania.
“Alone and together with the recent acquisitions in leading African markets of Nigeria and Morocco, this transaction is a reflection of Allianz’s long-term commitment to Africa and fits with our ambition to gain leadership positions in key markets in the continent.”
— Allianz Africa Regional CEO Coenraad Vrolijk
“We are pleased to embark on the first step of our strategic partnership with Allianz, which will support Jubilee’s ambition to increase insurance awareness and accessibility across East Africa by providing innovative, affordable and technically advanced property and casualty insurance products to consumers across the region”.
— Jubilee Insurance Chairman Nizar Juma
MTN Rwanda’s IPO
MTN Rwandacell PLC (MTN Rwanda), on 4th May 2021, made history in Rwanda by being the first mobile network operator to list its shares on the Rwanda Stock Exchange (RSE) through an introduction. MTN is the 10th company on the bourse and replaces Crystal Telkom:
A total of 1.35 Billion ordinary shares were registered with the RSE at an initial listing price of Rwf 269 [$0.27] per ordinary share bringing the total market capitalization to Rwf 363.4B [$370m]. The listing ensures that Crystal Telecoms shareholders now hold a direct 20% stake in MTN Rwanda. MTN REL (Mauritius) and MTN International (Mauritius) are the other shareholders with 25% and 55% respectively.
“We are honoured to be the first telecommunications network provider in Rwanda to be listed on the RSE. We are committed to further establishing our presence, expanding our connectivity, driving digital inclusion and contributing to the sector and economy… Listing on the RSE is a major milestone for us and the platform for even better and bolder things to come”
— MTN Rwanda CEO, Mitwa Ng’ambi
“This listing will assist in deepening the Rwandan capital markets by broadening public ownership over time and will also establish the basis for a new and emerging telecoms and technology asset class on the exchange.”
— MTN Group President and CEO Ralph Mupita
Here’s a thread we did on the Rwanda Stock Exchange:
Crown Paints Rights Issue Approved
Capital Markets Authority grants approval to Crown Paints Kenya to undertake a 1:1 rights issue targeting to raise Kshs. 711 million and list 71 million new ordinary shares on the NSE. The rights issue is aimed at boosting the company’s growth strategy and giving the company financial muscle to mitigate the challenges posed by the pandemic.
I&M Bank acquires Uganda’s Orient Bank Ltd
I&M Holdings Plc has completed the acquisition of 90% (87,075,000 ordinary shares) of Uganda’s Orient Bank Ltd after obtaining the necessary approvals from the Central Bank of Kenya, Capital Markets Authority of Kenya, Bank of Uganda, and the Comesa Competition Authority. The acquisition deal is valued at UGX 96.75B [$26.9m] and brings a net loan asset of KES 7.7B [$71.96m], deposits of KES 18.2B [$170.09M], and 70,000 customers.
“I&M Group aspires to be Eastern Africa’s leading financial partner for growth. The acquisition of OBL will place I&M Bank in an advantageous position to capitalise on the growth in the Eastern African economies and thereby ultimately increasing shareholder value.”
— I&M’s Group Executive Director, Sarit Raja Shah
Netflix charges in Kenya to go up
Netflix has this week communicated adjustments to its prices effective 30th May 2021. In emails to its subscribers, Netflix noted that some tax changes due to the addition of value-added tax (VAT) would impact membership prices. Below are the new prices:
Standard package: Sh1,100 [Up 150 ≈ up 15.8%]
Premium package: Sh1,450 [Up 250 ≈ up 20.8% ]
Basic package: Sh700 [No change]
Other noteworthy items:
Branch International is acquiring an 84.89% of issued share capital in Century Microfinance Bank
Optiven and Fusion Capital ink deal which will allow the real estate company to tap into a KSh. 1.2B asset in delivering 300 homes
DTB agreed to restructure a Sh1.7 billion short-term loan and provide Sh450 million in overdrafts to Kenyan retailer Tuskys
The Nairobi Securities Exchange market cap hits a 34-month high of Kshs. 2.62 trillion on Thursday this week, lifted by a rally of the share prices of Safaricom, East African Breweries, and banks.
Kenyan startup Lami raises $1.8M seed money to scale API insurance platforms across Africa. The round was led by Accion Venture Lab, a seed-stage investment firm that supports financial services targeted at underserved markets.
Acorn Project Two LLP issued a notice for early redemption of Ksh 777m under its Kshs 5b medium-term note program to be effected on 10th May 2021
The Kenyan 2020 finance bill is read for your reading. Download your copy here.