The acquisition will see Liberty become a wholly owned subsidiary of Standard Bank.
In July 2021, Standard Bank announced its intentions to buy the remaining shares of Liberty Holdings and to integrate the insurer more closely into the bank. The acquisition will see liberty delist from the Johannesburg Stock Exchange and become a wholly owned subsidiary of Standard Bank, which currently owns 54 percent of Liberty’s issued ordinary shares.
Standard Bank FD Arno Daehnke explains that the acquisition forms part of the bank’s focus to create new ecosystems. “Over the last 10 years, our bancassurance agreement with Liberty has generated more than R11 billion of value,” he says. “In the bank’s new ecosystem model, where you have to be much more integrated through your manufacturing and distribution of products, working through a bancassurance agreement is just not viable anymore.”
This, he adds, became apparent to the bank three years ago. “We had to rethink this model, and we could either structure a new bancassurance agreement, or we could think about integrating Liberty into the Standard Bank group and have a much more seamless experience for our clients.”
Standard Bank chose the latter. “Integrating Liberty will allow us to scale our insurance and asset management business, with R1.2 trillion assets under management in the new entity,” Arno says.
He believes it’s another step into the future for the Standard Bank Group to be much more effective and relevant to its clients.
“Liberty and Standard Bank have enjoyed a very rich relationship dating back 30 years,” Liberty FD Yuresh Maharaj (pictured) says. “Through various corporate transactions and negotiations, we found ourselves with Standard Bank holding the controlling stake in the company in the late 1980s.”
Because Standard Bank owned Liberty with a 54 percent shareholding, he explains that there is already an alignment of strategies in both entities and that it is “a natural progression of the relationship”.
The deal will see Liberty’s client base exposed to a wider financial service offering, while Liberty will be able to leverage the economies of scale that Standard Bank has to offer. “It’s a win-win, where Standard Bank can offer extended services to their clients and Liberty can have penetration into Standard Bank’s client base,” Yuresh concludes.
