Rabat - Africa’s largest insurance company SANLAM has dropped the bid to increase stakes in Morocco’s SAHAM insurance, according to a press statement released on January 4.

Citing unmet conditions, the South African financial giant announced halting acquisition plans for an additional 22.8% of stakes in SAHAM.

The press release, published by the Casablanca Stock Exchange, specifies that SANLAM’s share of SAHAM Assurance Maroc remains unchanged at 61.7%.

The now-abandoned transaction proposal also included a deal for SAHAM to reinvest and hold shares in SANLAM for a minimum of two years.

The shareholders had previously announced the acquisition on May 3, 2021.

SANLAM Group closed a $1.1 billion acquisition deal in 2018, gaining 61.7% of Morocco's largest insurance provider.

With a view of becoming a pan-African insurance company, SANLAM’s first acquisition in SAHAM was in 2016. The initial acquisition extended to 30% of SAHAM stakes. A year later, the company scaled up its acquisition to 46.6 over the following year.

Morocco is Africa’s second-largest insurance market behind South Africa. By acquiring a substantial stake in SAHAM, SANAM Group plans to take advantage of the group’s expertise in operating in Morocco, and its ties with West African markets. 

Experts speculate the sinking of the deal is due to the R5.8 billion ($365 million) impairment the company suffered in Morocco as COVID-19 struck.

The SAHAM acquisition is by far the biggest deal of its kind for the South African country, expanding the company’s presence in 33 countries across Africa.

Amid tight market restrictions in South Africa, the SAHAM acquisition locked for SANLAM the possibility of fast growth in Africa.

SAHAM’s turnover one year prior to the 2018 acquisition was set at $1.2 billion.

SAHAM alone operates 68 subsidiaries, with a network expanding beyond Africa to the Middle East.