(Correcting that Sanlam UK will not be selling its asset management business, but rather its life and pensions business).
(Alliance News) - Sanlam Ltd announced on Monday it planned to sell its UK-based life and pensions business for GBP39.0 million to Chesnara PLC, a Preston, England-based pensions and insurance firm.
The Bellville, Cape Town-based diversified financial services group said its wholly owned subsidiary Sanlam UK Ltd agreed to sell its 100% shareholding in Sanlam Life & Pensions UK Ltd to Chesnara. Sanlam Life & Pensions UK has GBP2.90 billion in assets under administration.
The deal, which is expected to be concluded in the first quarter next year, is subject to regulatory approvals in South Africa and the UK.
In a separate statement, Chesnara said it will fund the cash deal from its existing debt facility.
"We are delighted to announce this transaction which will expand the scale of our UK operations and deliver potential for material value creation for Chesnara. The expected incremental cash generation from SLP will enhance the sustainability of our progressive dividend strategy," Chief Executive Chesnara John Deane said.
Sanlam said this disposal is in line with its strategy to simplify its UK operations and reallocate capital to Africa and other selected emerging markets.
Sanlam shares were up 0.3% to ZAR60.83 on Monday just before midday in Johannesburg, while Chesnara added 1.2% at 305.00 pence each in London.
By Artwell Dlamini; artwelldlamini@alliancenews.com
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Chesnara (CSN)