Momentum revealed the acquisition in a shareholder notice, marking the culmination of a process that was first announced in July of 2019.
At the time, the acquisition was proposed at US$130.18 million (R1.938bn), covering 100% of the shares of AFI, which supports the business and its trademarks.
Momentum Metropolitan CEO Hillie Meyer said its portfolio of businesses already had substantial market share in the life insurance, investments, corporate and health products and the acquisition strengthened those synergies.
“This transaction more than doubles our client base to 150 000 policyholders and positions the combined short-term insurance business of Guardrisk, Momentum Short-term Insurance and AFI within the top three players in the short-term insurance market in South Africa,” said Meyer.
The shareholder notice said the company aimed to apply the net proceeds after tax to partially repay its revolving credit facility and complete the implementation of a proposed repurchase of Alexander Forbes shares.
“The sale proceeds of US$134.5 million (R2.0038bn) will be received by a subsidiary of the company, 90% of which is attributable to Alexander Forbes after minority shareholders’ interests,” the shareholder notice said.
The statement said the integration of the two businesses will be realised in several steps involving integrating operations and consolidating product offerings, which once concluded, will trade under the Momentum brand, using one insurance licence.
Momentum Metropolitan was formed from the merger of Metropolitan and Momentum, sizeable insurance-based financial services companies in South Africa and listed on the Johannesburg Stock Exchange on 1 December 2010.
The company is one of South Africa’s larger life insurers and integrated financial services company. It conducts its business through operating brands Metropolitan, Momentum, Guardrisk and Eris Properties.