Firstrand Limited - Press Release: Healthy Outcome For Momentum
FIRSTRAND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1966/010753/06)
(Share code: FSR)
(ISIN: ZAE000066304)
(`FirstRand`)
Momentum Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1904/002186/06)
(`Momentum`)
PRESS RELEASE: Healthy outcome for Momentum
Momentum has agreed to sell its 34% shareholding in African Life to Sanlam at a
price of R882 million which represents R22.50 per share. In a separate
transaction Momentum also announced that they have made an offer to acquire
African Life Health (ALH) from African Life for R175 million.
Hillie Meyer, Managing Director of Momentum commented: `We have indicated over
the last two years that we are sellers of our stake in African Life. We are very
satisfied with the transactions we concluded and believe this has resulted in an
attractive outcome for all shareholders`.
When asked why Momentum wanted to sell its shareholding in African Life, Meyer
said that Momentum operates in the upper income market in South Africa and that
within the FirstRand Group there are other opportunities to reach the middle and
lower end of the market. `Momentum is currently involved in such an initiative
with FNB, so strategically it is just the best move for us` Meyer commented.
`The acquisition of ALH is complimentary to our current strategy and positioning
in the health industry,` said Meyer. `ALH has a footprint in market segments
where Momentum would like to have a presence, for example local governments, the
emerging market as well as Africa`. With this transaction Momentum will entrench
its position as a significant player in the health industry and maximise
economies of scale by servicing various health market segments.
Peter Botha, MD of ALH said that Momentum and ALH share a strategic vision of
consolidating the market and growth by acquisition. `This is a win-win deal for
both parties concerned. Momentum gives ALH access to a large capital base and
ALH gives Momentum access to new market segments. Our clients can look forward
to become part of one of the most innovative and successful companies in the
market and have access to its range of products` said Botha.
The acquisition of ALH will more than double the number of principal members
under Momentum`s administration from 105 000 to more than 240 000.
Both transactions are subject to regulatory approvals, including that of the
Competition Commission.
10 August 2005
Spokespersons:
African Life transaction:
Hillie Meyer, MD Momentum
Frans Truter, Head of Strategic Investments Momentum
African Life Health transaction:
Hillie Meyer, MD Momentum
Nicolaas Kruger, Head of Employee Benefits and Health Business, Momentum
Dr Peter Botha, MD African Life Health
Contact: Sonja Malan
PR
Momentum
012 673 7543
083 635 6965
Corporate advisor to Momentum
Rand Merchant Bank
Date: 10/08/2005 12:59:03 PM
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