Mergers & Acquisitions | |
Mergers & Acquisitions | |
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Thursday,
April 16, 2020 / 8:40 PM
/ FBN Holdings / Header Image Credit:
FBN Holdings Plc, the holding company for First Bank
of Nigeria and its former subsidiaries, has announced ongoing discussions to
fully divest from its insurance arm, FBN Insurance Business Limited.
Related Link: FBNH
Notifies of Proposed Divestment From FBN Insurance
In a regulatory filing at the Nigerian Stock Exchange (NSE), FBN Holdings stated that it has started discussions with its partner Sanlam Emerging Markets, which holds 35 per cent equity stake in FBN Insurance Limited, on proposed sale of FBN Holdings' 65% majority equity stake in FBN Insurance Limited.
Sanlam Group has been associated with and has been the
other shareholder of FBN Insurance Plc since it was established in 2010. Sanlam
with over 100 years experience and expertise in Insurance, asset management,
wealth management and investments is one of the leading Insurance companies in
Africa.
According to the formal notice sent to the Exchange
and signed by the Company Secretary Seye Kosoko, FBN Holdings stated that the
move was in line with the "group's strategic objectives" adding that they are
currently engaging the regulators for the necessary approvals.
FBN Holdings however assured the Exchange that further
announcement will be made if the transaction is concluded. The proposed
divestment is said to be a strategic business decision for FBN Holdings. When
completed, the transaction will involve the transfer of FBN Holdings' 65% stake in FBN Insurance Limited to Sanlam.
The notification to the NSE is one of the statutory
steps required of listed companies when considering a market-sensitive decision
or transaction. In deference to Rule 17.5 of the Rule Book of the Exchange
2015, FBN Holdings first notified the market of the development in the
directors' report section of its audited financial statements for the year
ended December 31, 2019 which was released to the Exchange on Monday, April 6,
2020.
Key extracts of the audited report for the year ended
December 31, 2019 showed that FBN Holdings posted a profit before tax of N84
billion, representing a growth of 31 per cent over N64 billion recorded in
2018. Profit after taxation rose by 27 per cent to N74 billion in 2019 as
against N58 billion reported in 2018. The board of directors has recommended
payment of sum of N13.64 billion as cash dividend for the 2019 business year,
representing a dividend per share of 38 kobo, an increase of 46 per cent over
payout for the 2018 business year.
The proposed divestment will unlock significant value
to leverage the group's strength in its core business for which it is renowned.
FBN Insurance was founded as a life insurer in 2010
with a vision to be Nigeria's first choice in risk underwriting, wealth
preservation and financial security. Today, the company has grown to become one
of the best insurance companies in Nigeria with a subsidiary that undertakes
general insurance business offering a broad range of investment and risk
underwriting products.
FBN Insurance is known and well respected for its
quality of service, integrity, innovation and professionalism. It was awarded
the 'Best Life Insurance Company in Nigeria' for four year.
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