Old Mutual Plc, Africa’s biggest insurer, agreed to sell its Skandia units in Germany and Austria for 220 million euros ($303 million) as it focuses on expansion in emerging markets.
Heidelberger Lebensversicherung AG, an investment firm controlled by Cinven Ltd. and Hannover Re, is buying the two units, the companies said in statements today. The businesses had more than 400,000 insurance policies and 4.9 billion euros of assets under management as of December.
The purchase will more than double Heidelberger Leben’s assets to about 10 billion euros. The firm is seeking to buy up life insurance providers that are closed to new customers in a similar way to how Clive Cowdery built up Resolution, his insurance buyout firm in the U.K.
Heidelberger Leben is seeking to “build a strong consolidation platform for life insurance companies and portfolios in Germany and Austria,” it said a statement.
Lloyds Banking Group Plc, Britain’s biggest mortgage lender, sold Heidelberger Leben to private-equity firm Cinven and Hannover Re last year. Cinven owns 80 percent and Hannover Re, the world’s third-biggest reinsurer, 20 percent.
The two businesses are part of the London-based insurer’s wealth division, Old Mutual said. The company said it expects the transaction, which is subject to regulatory approval, to be completed by the third quarter.
Former Old Mutual Chief Executive Officer Jim Sutcliffe bought Stockholm-based Skandia AB for 56 billion Swedish kronor ($8.4 billion) in 2006 to lessen the company’s dependence on South Africa.
The insurer, which still makes most of its profit in Africa, is focusing more on the continent since Sutcliffe’s departure in 2008 and has also sold its Finnish and Polish Skandia units in the past two years. The company is looking for more acquisitions in Ghana, Kenya and Nigeria this year, CEO Julian Roberts said on Feb. 28.