In March 2016, the Financial Services Board approved Mutual & Federal’s transaction to acquire 100% of the issued shares in Credit Guarantee Insurance Corporation of Africa Ltd (CGIC). This confirmed CGIC as a core asset within Mutual & Federal’s portfolio of insurance businesses.
Mutual & Federal has now accepted an offer from Atradius N.V. , a leading global trade credit insurance, surety and collections services company, for a 25% strategic equity stake in CGIC. Atradius operates in 160 offices in 50 countries, generates Euro 1.7 billion in revenue and enjoys a credit rating of A from AM Best credit rating agency.
“As the Africa trade credit insurance leader, CGIC has been partnering with Atradius for a number of years to service our global customers operating on the continent. This transaction provides an exciting opportunity to extend the market reach in South Africa and beyond for CGIC and Atradius.” said Andreas Tesch, Chief Market Officer (CMO) Atradius
This strategic deal will see CGIC transformed from a stand-alone business, owned by four South African shareholders, to a core asset in Old Mutual Emerging Markets (OMEM)’s integrated financial services proposition in Africa. Additionally, CGIC will benefit from Atradius’ leading position as a global credit insurer. The combination creates a stronger platform from which CGIC is expected to grow revenues and profits.
“Accelerated execution of our business strategy will be made possible through access to best-in-class skills and experience, as well as to world class products, systems and processes taking our long standing co-operation with Atradius to the next level,” says Charles Nortje, CEO of CGIC.
The proposed transaction is subject to internal and regulatory approval and an appropriate due diligence review outcome, with the aim to finalise the deal by the end of this year. “We look forward to the value that this will unlock, as we build a leading property, casualty and credit insurance business in Africa,” concludes Mutual & Federal CEO, Raimund Snyders.
About Mutual & Federal
Mutual & Federal is the oldest short-term insurer in South Africa with a history that dates back more than 180 years. We partner with brokers to offer an extensive range of insurance products and solutions to fulfil personal, commercial and corporate needs. We also provide insurance products for the agriculture, engineering and marine sectors. As a brand, we promise to enable positive futures as we protect what’s important to our customers and put them first in everything that we do.
Source: Atradius Press Release