Fairfax Financial Holdings Limited acquires Zurich Insurance
Swiss-based insurer Zurich has announced that its South Africa and Botswana operations will be acquired by Canada-based Fairfax Financial Holdings Limited. The announcement ended speculation that Zurich’s parent has been planning to exit South Africa. Zurich said in a statement:
"At the group's Investor Day in May 2015, Zurich stated that reshaping its geographic footprint would be one of its highest priorities over the next two years as it seeks to build a more sustainable business while also improving overall profitability While South Africa and Botswana remain attractive markets, a comprehensive assessment found that there was limited scope for Zurich to achieve an operating scale that warranted continued investment."
According to Fairfax, a financial services holding company listed on the Toronto Stock Exchange, the acquisition represents an expansion of its commercial insurance presence in Africa. Prem Watsa, chairman and CEO of Fairfax, has been quoted in the media as saying that the acquisition represents a key step in expanding the company's presence in Africa - a market it deems "important".
The sale will be a 100% acquisition and remains subject to regulatory and competition commission approval. Fairfax expects it to be concluded by end 2016. While the value of the deal has not yet been disclosed, the net asset value of the combined South African and Botswana business is estimated at some R1.8 billion.