In line with its expansion strategy in south eastern sub-Saharan Africa, Mauritius Union Assurance acquired the company at an estimated 22.6 million US dollars. The acquisition of stake in Phoenix was completed on 30 May 2014.
“When [Mauritius Union Assurance] started the discussions with Phoenix, they decided to sell us the maximum that we could hold in the operating company which is 66 per cent,” Kris Lutchmeenaraidoo, CEO of the Mauritius Union Assurance told CNBC Africa.
The Mauritius Union Assurance Company Limited was incorporated in 1948 and has been listed on the Stock Exchange of Mauritius since 1993.
Phoenix was established in 1912, and has since expanded into the East African region, through its subsidiaries in Uganda, Tanzania and Rwanda. The insurer covers the full spectrum of short term insurance lines.
The board of Mauritius Union Assurance believes that the proposed transaction will help to create value for its shareholders in the future.
“We are lucky to get such an opportunity where by buying in a holding we could get an entry in four countries. We are now settled down with this operation where once we take full control of it, we will then see where it takes us further in the continent,” Lutchmeenaraidoo said.
Mauritius Union Assurance said the transaction shall be partly financed by its own resources together with a rights issue.
“Mauritius Union has sufficient resources to settle the whole amount but given when you invest in subsidiaries you have a capital charge. We may have to raise some funds to meet our solvency requirements,” Lutchmeenaraidoo stated.