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DealMakers AFRICA 2020 Annual

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Deal of the Year (East Africa)


Formation of a strategic partnership between Jubilee and Allianz

Observing the industry trends in other countries, Jubilee was cognisant of increased demand by customers for more innovative and tailored products to be delivered digitally. Over a number of years, the company has built up a leading market position in short-term general insurance in East Africa; in Uganda and Tanzania, in particular. The next step for Jubilee was to take the group to the next level. Allianz Africa, a subsidiary of  German Allianz SE, had entered the East African market with a greenfield insurance company in Kenya, but was slow in building up market share. The parties, who have been talking for the past four years, saw the opportunity to work together to transform the short-term insurance industry in the East African market, by combining strengths through a strategic partnership.


In September 2020, Jubilee announced that it had entered into a set of binding agreements with Allianz Africa, in respect of the company’s short-term general insurance businesses in Kenya, Uganda and Tanzania, and its short-term general and medical insurance businesses in Burundi and Mauritius. Allianz would become a co-shareholder by purchasing controlling interests of between 51% and 66% in the target companies, and transferring Allianz Kenya to Jubilee General Insurance to be jointly owned.

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An aggregate cash consideration of US$100 million (KES 10,8 billion) was paid to Jubilee and its affiliate, the Aga Khan Fund for Economic Development – representing a significant premium over the multiples at which the Jubilee shares were trading on the Nairobi Stock Exchange. According to Stanbic Bank, the agreed consideration reflects a price to carve-out IFRS Book NAV multiple of 4.31x and a price to carve-out annualised HY20 earnings multiple for the target companies of 16.4x.


The transaction was complex, and involved a protracted negotiation process to meet the divergent needs of the buyer and the seller to achieve an alignment of interests. The transaction involved a number of steps; existing Jubilee subsidiaries in Tanzania and Uganda were restructured by way of a split of the medical insurance business from the property and casualty insurance business in those countries. It also required the sale of the controlling interest in five subsidiary companies by Jubilee and affiliates to Allianz, whilst retaining a significant minority stake in each, and the split of the composite insurance business conducted by Jubilee’s subsidiary in Kenya into Jubilee General, Jubilee Health and Jubilee Life. And lastly, it entailed the transfer of the Allianz Kenya insurance portfolio to Jubilee.


Other complications arose from the different regulatory regimes in place in each country, and the existence of minority shareholders in some of the entities. And to top it off, the transaction was conducted during the COVID-19 pandemic, which itself brought challenges to the negotiating table, with price adjustment mechanisms negotiated on the basis of extensive due diligence processes by Allianz.


This strategic partnership, in the form of Jubilee Allianz General Insurance, will draw on Allianz’s expertise in retail, digital insurance and micro-insurance, deployed in several developing markets across the globe. This, coupled with Jubilee’s well established reputation, market presence, distribution networks, local experience and expertise, will allow the partnership to offer innovative, affordable and technically advanced products to a growing section of the regional population. The ambition of the parties is to increase insurance awareness and accessibility.

Regulatory approval was obtained from the COMESA Competition Commission, insurance regulators in each of the five jurisdictions, as well as from Jubilee’s shareholders. The company is listed on the Nairobi Stock Exchange and cross-listed on the Uganda Securities Exchange and Tanzania Securities Exchange, which also involved liaising with the relevant capital market authorities.

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The transaction is the largest announced in East Africa during 2020, and the region’s second single largest deal in the industry after the $250 million purchase of a 60% stake in UAP Holdings by Old Mutual in 2015. As such, the transaction represents a significant and important inward investment into the region and sector.

Financial Advisers: Stanbic Bank Kenya
Legal Advisers: Bowmans; CMS Daly Inamdar; Slaughter and May

Runner up


Co-Operative Bank of Kenya’s acquisition of a 90% stake in Jamii Bora Bank

The consolidation of the Kenyan banking sector, a trend first identified in 2016 with the failure of three mid-sized and small lenders and the implementation of a cap on commercial lending rates, has seen a number of mergers in the sector. The DealMakers AFRICA East Africa Deal of the Year for 2019 was the acquisition by CBA group of NIC Bank to form NCBA.  

Co-operative Bank of Kenya (Co-op Bank) announced in March 2020 that it would acquire a 90% stake in micro-lender Jamii Bora Bank, (JBBL) the second-smallest lender in Kenya, with 17 branches across the country, some 445,000 customers, KES 4,7 billion in deposits, and a gross loan book of KES 9,3 billion. JBBL has positioned itself as an enterprise bank which focuses on micro, small and medium enterprises – one of the key growth areas of the Kenyan economy – which has enabled it to provide flexible, affordable and innovative products and services, including flexible short-term trade and working capital solutions.

Co-op Bank, established in 1965 and listed on the Nairobi Stock Exchange in 2008, is owned by Kenya’s 15 million co-operative members, and is the country’s third-largest bank by market share with 9.44% of the domestic market. The bank has a total asset base of $4,16 billion and has 159 branches across Kenya and South Sudan. Post-merger, the market share of the merged entity will be 9.65%. There are currently 42 licensed banks in Kenya.

Co-op Bank will acquire 224,2 million ordinary shares in JBBL at KES 4,46 per new share, in exchange for KES 1 billion, and JBBL will be renamed Kingdom Bank and trade as a subsidiary of Co-op Bank. The transaction will diversify the business models of the two institutions, benefitting Co-op Bank’s diverse shareholders and strengthening both by leveraging on their respective domestic and regional corporate public sector.

The deal, which enhances the resilience of the Kenyan banking sector, provides Co-op Bank with the opportunity to rapidly expand its offering to micro, small and medium enterprises, and increase its revenue streams while leveraging on cost synergies. 

The offer was accepted in June, and regulatory approval was obtained from the Capital Markets Authority, the Central Bank of Kenya and the Competition Authority of Kenya. 


Financial Advisers: NCBA Capital, PwC Kenya
Legal Advisers: IKM Advocates

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