5 January 2012
Marsh, a wholly-owned local unit of US-based insurance and risk management group Marsh & McLennan, has completed its acquisition of the brokerage business of South African insurer Alexander Forbes, significantly expanding its presence in sub-Saharan Africa.
Marsh said in a statement on Wednesday that the transaction comprises its South African insurance broking operations, Alexander Forbes Risk Services and related ancillary operations, as well as Alexander Forbes’ insurance broking operations in Botswana and Namibia.
It had also agreed to acquire other Alexander Forbes risk operations across sub-Saharan Africa – in Malawi, Mozambique, Nigeria, Uganda and Zambia – subject to regulatory and other approvals. These transactions were expected to close “in the first quarter of 2012”, the company said.
Alexander Forbes CEO Edward Kieswetter told Business Day that the whole transaction, once finalised, would be valued at between R1-billion and R1.1-billion.
Expanding presence in sub-Saharan Africa
“This transaction gives Marsh a leading market position in South Africa and significantly expands its presence in some of the most vibrant economies in the sub-Saharan region,” the company said.
“In particular, it greatly enhances Marsh’s position in Africa’s major business sectors, including mining and minerals, power, telecommunications, transport and construction. It also extends Marsh’s reach into the dynamic middle market.”
David Batchelor, president of Marsh’s international division, said the combination of Alexander Forbes’ “well-established South African operations, its regional network and respected team, together with Marsh’s existing South African business, global solutions, resources and placement skills, will bring dramatically enhanced benefits to all our clients.
Ambition to become ‘pan-African leader’
“Companies in the rapidly-developing African region are increasingly looking for insurance brokers and risk advisers that can help them both protect their vital assets and grow,” Batchelor said. “This transaction, which is driven by our growth ambitions to be a pan-African leader, gives us a powerful platform to meet these expectations.”
Jurie Erwee, newly appointed CEO of the combined enterprise, now called Marsh Africa, said: “Together, as we unite our growth ambitions to become the continent’s pre-eminent broker and risk adviser, we are committed to bringing the world’s best to Africa.”
On closing the transaction, Marsh retained its level 3 status in its black economic empowerment (BEE) scorecard rating.
“Through focused investment and support, Marsh has made significant achievements in its levels of black economic empowerment,” Erwee said. “The combined Marsh entity will remain strongly committed to continuous improvement in its BEE performance levels.”