UAP Holdings will acquire all the subsidiaries of Old Mutual Kenya as the firms move to tighten their merger ahead of a planned listing on the Nairobi Securities Exchange (NSE).
UAP-Old Mutual Kenya Group chief executive Peter Mwangi told the Business Daily that the company expects to conclude the acquisition by end of the year, and by July 2017 the overlapping units will have been fully merged.
Old Mutual acquired a majority stake of 60.7 per cent in UAP for Sh25.6 billion ($253 million) in July 2015, but the two holding companies have continued to operate similar subsidiaries in life insurance and asset management as they work out the complex merger process.
“UAP will acquire the subsidiaries held under Old Mutual Kenya. Once it is done, we will have two life and asset management companies under UAP, which we will then merge into one. Both the acquisition and mergers require approvals from the Insurance Regulatory Authority and the Capital Markets Authority and shareholders however,” said Mr Mwangi.
“UAP Holdings is a public company trading over the counter and has issued a listed bond. It was on the path to listing, so it makes sense for us to use it as the listing company for the merged group. It is the natural vehicle to list,” he said.
Old Mutual’s subsidiaries include Faulu Kenya, Old Mutual Securities, OM Asset managers, OM Investment services, OM Properties, OM Capital and OM Life Assurance, which will now all come under the umbrella of UAP.
UAP Holdings’ subsidiaries are in life insurance, general insurance, investment management, property management and financial advisory services. The insurer also operates regional units in Uganda, Tanzania, Rwanda, South Sudan and in the Democratic Republic of Congo.
Old Mutual Kenya directly owns part of UAP, with the remainder of the 60 per cent stake held by the mother company through South African-based Old Mutual Emerging markets (OMEM).
The restructuring will therefore see Old Mutual Kenya remain a holding company with UAP Holdings as its only asset in the country. In this way, Old Mutual Kenya will own shares in UAP under which all the Kenyan subsidiaries will be held.