BIHL gets the nod to acquire half of Teledimo

Keikantse Lesemela
Monday, 18 January 2016
OUTGOING BIHL CEO, Gaffar Hassam OUTGOING BIHL CEO, Gaffar Hassam

The Competition Authority CA has approved Botswana Insurance Holdings Limited (BIHL) acquisition of 50 percent shares in Teledimo (Pty) Ltd.  Teledimo is a company that owns the country’s largest short-term insurer, Botswana Insurance Company (BIC).

According to a statement, the CA unconditionally authorised the transaction on the basis that there are no substantive competition concerns that will arise in the transaction. BIHL recently acquired 25 percent shares in a Malawian company - Nico Holdings Limited - which offers general insurance business, life insurance and pensions business, banking business, asset management, information technology and investment holding.

Nico Holdings is listed on the Malawian Stock Exchange and operates in five countries being Malawi, Tanzania, Uganda, Zambia and Mozambique. BIHL directly owns and controls Botswana Insurance Fund Management Limited (“BIFM”) which is licensed as an asset management firm; Botswana Life Insurance Limited (“BLIL”) which is licensed as a life insurer; and BIHL Insurance Holdings Ltd (“BIHL Sure”) which is licensed as a short-term insurance company, specialising in Legal Assurance.

BIHL and its subsidiaries (“the Group”) underwrite all classes of long-term insurance, legal insurance, administer deposit administration schemes, manage investments and administer life and pension funds.

It also has associate holdings of 23 percent in Letshego Holdings and 33 percent in Funeral Services Group (FSG). Upon the merger, BIHL group will restructure BIHL Sure and consolidate it within the BIC portfolio. In a statement the authority highlighted that it is aware of the BIHL group’s intention to subsequently restructure BIHL Sure and consolidate it within the Botswana Insurance Company (BIC) portfolio.

“This approval is therefore solely for the proposed acquisition of 50 percent shares in Teledimo (and indirectly BIC) and not the intended merger between BIHL Sure and BIC, which would have to be notified with the authority in the event that the transaction meets the stipulated merger control thresholds,” states Competition Authority. In 2014 BIHL management decided to sell the product owned by its subsidiary, BIHL Sure! to BIC as it was continuously making losses in the group.

In the six months to June 2014, the losses of BIHL Sure! jumped 61 percent to P7.3 million. Meanwhile Competition Authority has conditionally approved acquisition of Kentucky Fried Chicken (KFC) franchise restaurants in Botswana by Callus (Pty) Ltd from the local company Venture Partners Botswana (VPB). In a statement, Competition Authority pointed that the transaction has raised public interest concerns although there are no substantive competition concerns.

“Though there are no substantive competition concerns that would arise in the market for quick-service or fast food restuarants, the transaction has raised some public interest concerns and as such, the authority determined to authorise the transactions with conditions,” reads the statement. During the public hearing on the transaction citizens raised complaints that the country is not benefiting from KFC business.

Among the conditions, Callus is expected to continue sourcing from the same suppliers that were engaged by VPB and YUM restuarants International (Pty) Ltd accredited and other YUM accredited suppliers based in Botswana. Callus is a company incorporated under the laws of Botswana, and is a wholly owned subsidiary of Country Bird Holdings (Pty) Ltd (“CBH”), a company incorporated in South Africa.

In addition to its interest in Callus, CBH has a 100 percent shareholding in Ross Africa Limited, a company duly incorporated in terms of the laws of the Republic of Mauritius. Ross Africa Limited, in turn, has a 60 percent shareholding in Master Feeds (Pty) Ltd, a company incorporated in accordance with the laws of Botswana.

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