MMI acquires Momentum Short-Term Insurance
Insurance giant MMI announced this week the dissolution of the joint venture in Momentum Short-term Insurance after its wholly owned subsdiary, Momentum Group entered into a binding sale of shares agreement with OUTsurance that will see the former acquire OUTsurance’s 50% shareholding in the short term insurance company.
The deal is subject to the fulfilment of certain suspensive conditions, and although the purchase price is not known yet, it is expected not to exceed N$150 million. Momentum says it will fund the acquisition from it’s own cash resources.
It already owns the other 50% of the issued share capital of Momentum Short-term Insurance (MSTI).
MSTI conducts short- term insurance business and provides personal and commercial lines cover to individuals and business owners through a network of registered or affiliated intermediaries.
MMI`s vision is to be a leader in meeting financial services needs, both in South Africa and selected countries in the rest of Africa.
“MMI is currently under-represented in the short-term insurance market in South Africa. Full ownership and control of MSTI will enable MMI to effectively leverage its shareholding in MSTI. The Transaction will allow MMI to closer align short-term insurance products with its other products and optimise the use of MMI`s strong intermediary-based distribution channels,” the company said in a statement.
MMI said it plans to create the necessary intellectual property, skills and capacity to provide further growth in the short-term insurance industry.