Tokio Marine Buys Minority Stake in S. Africa Insurer Hollard for African Foothold

Japanese insurer Tokio Marine Holdings Inc. agreed to buy a minority stake in South Africa’s Hollard Insurance Co. Ltd. to help both companies expand through Africa.

Tokio Marine will pay 5 billion rand ($327 million) for a 22.5 percent shareholding in Johannesburg-base Hollard, one of sub-Saharan Africa’s largest providers of property and casualty insurance. The deal will enable Tokio to gain a foothold in markets such as South Africa and Botswana from its base in Chiyoda-Ku, Japan.

The transaction fits with South African President Cyril Ramaphosa’s plan to attract $100 billion in foreign investment over the next five years, a strategy he hopes will revive an economy that slipped into recession in the second quarter. For Hollard, the capital boost will provide the insurer with funds to expand into new regions including East Africa and West Africa, Chief Executive Officer Saks Ntombela said by phone.

The deal comes after a series of transactions for closely held Hollard, including the acquisition of Regent Insurance Group for 1.8 billion rand. “This is a game-changer for our business that will greatly assist us in growing our international business, that now makes up a third of the company’s bottom-line,” Ntombela said.

Hollard was founded in 1980 by Robert Enthoven, and the family still holds a majority share.

Topics Mergers & Acquisitions Carriers