INSURANCE: Metlife, Momentum Merge
Recent Western Cape Business News
In a joint statement FirstRand, Momentum and Metropolitan announced that they have reached agreement to merge Momentum and Metropolitan to create a major new South African insurance group.
Commenting on the transaction Wilhelm van Zyl, CEO of Metropolitan, believes the proposed business combination with Momentum is very compelling in terms of growth.
“The merger will create a leading insurance-based financial services group and significantly expand Metropolitan’s product offerings. The merged entity will benefit from enhanced growth opportunities, revenue synergies and economies of scale through complementary target markets, a strong human capital base and increased financial resources.”
With regards to the strategic benefits and opportunities of the merger, currently Metropolitan operates mainly in the low to middle-income retail markets whilst Momentum focuses primarily in the upper-income retail market. In employee benefits, Momentum’s umbrella retirement funds have a strong market presence and Metropolitan has well-established relationships with a large number of public sector and corporate clients and attained critical mass in the retirement fund administration arena.
Metropolitan is the leading player in the healthcare administration of closed schemes. Momentum has a product-oriented focus primarily aimed at the Momentum Health open scheme, supported by a strong broker distribution arm.
FirstRand will unbundle its shareholding in the merged entity to FirstRand shareholders and no longer have a direct shareholding in Momentum. As a result of the unbundling FirstRand shareholders will own around 60% and current Metropolitan shareholders around 40% of the entity. RMB Holdings, which is a large shareholder in FirstRand, has expressed its intention to own more than 25% of the merged entity.
Business News Sector Tags:
Fax 2 Email
Study IT Online
Work from Home