Liberty Holdings to buy control of Kenya's CfCIH

South African insurer Liberty Holdings said on Thursday it will take a controlling stake in Kenya's CfC Insurance Holdings (CfCIH).

Liberty, majority-owned by Africa's biggest bank by assets Standard Bank, said it would become a 57 per cent shareholder in CfCIH through a series of agreements after Standard Bank restructured its East Africa assets, owned by its unit Stanbic Africa.

The agreement would also enable CfCIH to be listed on the Nairobi Stock Exchange.

"Our intention is to enter markets that are benefiting from political and regulatory stability, where there is strong economic growth and where there is potential for greater penetration of wealth products," said Bruce Hemphill, Chief Executive Officer of Liberty Holdings.

In 2008, Stanbic Africa (SAHL) bought a 60 percent stake in Nairobi-listed CfC Bank Ltd, which it merged with Stanbic Kenya.

The new business is known as CfC Stanbic Holdings (CSH), which is 60 per cent held by Standard Bank, Liberty's parent company.

CSH controls both the CfC Life and Heritage business, which owns 60 per cent of Heritage Insurance Company Tanzania.

In 2004 CSH bought insurance business of American Life Insurance Company, and the business was rebranded into CfC Life and has been renamed CfCIH.

As part of the transaction CfC Life and Heritage, which are controlled by CSH, will be restructured into a unit of CfCIH and Liberty would be a controlling shareholder through an initial acquisition of 24 per cent stake in CfCIH for 88 million rand.

CfCIH, which comprises general, life and health insurance businesses in Kenya and Tanzania would use the proceeds to enhance the capital base of the insurance business and reduce its level of financial gearing, and demerge from the banking and financial businesses of CSH.

Through a voluntary agreement with SAHL, Liberty would also buy an additional 33 per cent stake in CfCIH from SAHL, making it a controlling shareholder in the Kenyan company.