Standard Bank to acquire remaining Liberty stake for R10.6 billion

The deal will creating a financial conglomerate that will expand across the continent.

Standard Bank will pay $728.75 million (R10.6 billion) to acquire the remaining shares of insurer Liberty Holdings that it does not already own, forming a financial conglomerate that will expand across Africa.

Standard Bank already owns a 54 percent stake in Liberty and, following the news of the buyout, the insurer and asset manager’s stock rose by 25 percent.

According to Standard Bank, the move was a natural progression in their relationship and aligned with its strategy of providing a broader range of financial services to its customers across the continent.

“This will be a whole that will be much greater than the sum of its parts,” said Standard Bank CEO Sim Tshabalala. He added that the transaction would also bring capital efficiencies and growth opportunities, as insurance penetration in African markets is only 17 percent or lower.

Both Standard Bank and Liberty said that the merger would give them larger scale and more ability to capitalise on one another’s customer bases, complementary products and technology.

Liberty chief executive David Munro said the deal would also allow Liberty to re-enter markets on the continent, which the company has previously attempted. If the deal is approved, Liberty shareholders will receive 0.5 Standard Bank shares and R25.50 in cash for each Liberty share, for a total value of R89.46 per share.

According to the companies, this represents a 32.6 percent premium over Liberty’s closing price on 14 July 2021.
Standard Bank claimed it has received letters of support from Liberty shareholders, who own a total of 41 million shares.