PROPOSED ACQUISITION BY SANLAM EMERGING MARKETS PROPRIETARY LIMITED OF 50% OF THE SHARES IN AYO HOLDINGS LIMITED

Case type: MRR Form 2 (Simplified Procedure) Case Parties: Sanlam Emerging Markets Proprietary Limited/aYo Holdings Limited Published: 12 Apr. 2022

The proposed transaction comprises an acquisition in that Sanlam Emerging Markets Proprietary Limited (SEM) (a South African based entity with financial services activities across the African continent) is acquiring 50% of the shares of aYo Holdings Limited (aYo) (a Mauritian based entity with activities in a number of African countries) (the Proposed Transaction). Post the implementation of the Proposed Transaction, SEM will for competition law purposes acquire a form of control over aYo. aYo is part of the MTN group a mobile operator active in a number of countries across Africa, including Nigeria. SEM is a wholly owned subsidiary of Sanlam Life Insurance Limited, which itself is wholly owned by Sanlam Limited (Sanlam). In Nigeria, SEM indirectly controls FBN Insurance Limited (FBNI) (which includes FBN General Insurance Limited (FBN GI)) and Continental Reinsurance Plc (Continental). aYo controls aYo Micro Insurance Limited (aYo Nigeria) in Nigeria. aYo Nigeria is not yet active, but may be active by the time the Proposed Transaction is implemented. The Proposed Transaction comprises a foreign-to foreign transaction and potentially triggers merger notification in Nigeria, if aYo Nigeria becomes operational prior to the implementation of the Proposed Transaction. In the circumstances, the parties do not concede that the Proposed Transaction meets the merger notification requirements but have notified it in Nigeria out of an abundance of caution. The parties therefore reserve their rights in this regard. In Nigeria, the Sanlam Group (comprising SEM and all its subsidiaries), through FBNI, FBN GI and Continental, is active in the insurance industry and respectively provide life insurance, general insurance and reinsurance in Nigeria. As noted above, aYo Nigeria is not operational and is therefore not conducting, nor has it ever conducted, any commercial activities within or that have an effect within Nigeria. Whilst it is not yet operational, it is possible that aYo Nigeria will in the future become so (before the Proposed Transaction closes), and thereafter will sell micro insurance products to low income consumers in Nigeria. Whilst the short-term focus will, once aYo Nigeria becomes operational, be on micro insurance products to low income consumers, in the longer run aYo Nigeria will also focus on other financial service products to underserviced segments of the market. This merger filing is therefore made on the basis that aYo Nigeria may become operational before the Proposed Transaction is implemented in the rest of Africa. Once aYo Nigeria becomes operational, it will operate in the market for the provision, sale and distribution of micro insurance products in Nigeria, a market that is presently underserviced, and where neither the Sanlam Group nor aYo Nigeria have any presence prior to the Proposed Transaction. In other words, when aYo Nigeria becomes operational, it will be a new entrant into the market for the sale and distribution of micro insurance products in Nigeria. The rationale for the merger is that the Sanlam Group is of the view that there is significant scope for growth in the micro insurance industry, amongst others.