Posted by By Joshua Nse on
TWO groups of insurance firms at the weekend sealed their merger agreements with the signing of Memoranda of Understanding (MOU) in Lagos to fuse their underwriting business operations in the current recapitalisation and consolidation in the industry.
TWO groups of insurance firms at the weekend sealed their merger agreements with the signing of Memoranda of Understanding (MOU) in Lagos to fuse their underwriting business operations in the current recapitalisation and consolidation in the industry.
The merging partners in the Royal Exchange Assurance (Nigeria) Plc-led group include the Lion of Africa Insurance Company Limited and the African Prudential Insurance Company Limited.
The other group that signed a merger pact comprises of the Regency Insurance Plc, Nigerian Alliance Assurance Corporation Limited, Destiny Insurance Company Limited, and Capital Express General Insurance Limited with the new Logo - Regency Alliance Insurance Plc.
This brings to six groups of mergers and acquisitions that have so far been achieved in the current recapitalisation and consolidation exercise which is to end on February 28, 2007.
The chairman of Royal Exchange Assurance (Nigeria) Plc (REAN), Alhaji Muhtar Bello Yola, who spoke on behalf of the other stakeholders in the group said the decision was taken in compliance with the consolidation directive of the government and National Insurance Commission (NAICOM) for the industry.
His wrods: "The three insurance companies, two of which share a common ancestry and all of whom have a common shareholding interest, have identified each other as potential consolidation partners who by the pooling together of their respective businesses, shareholder groups, management's, goodwill and other constituent components would create increased value for their stakeholders.
"The parties having satisfied themselves that they are compatible and share a common vision and goals, following preliminary discussions, have mutually agreed to enter into this MOU, which shall form the basis of their interaction, cooperation, discussions and negotiations. It shall also constitute the framework for other mutually beneficial definitive agreements they may subsequently enter into, in order to facilitate the business combination of the parties."
The managing director and Chief Executive Officer, Regency Insurance Plc, Mr. Biyi Otegbeye, who spoke to The Guardian after the signing of the MOU for his group said: "The signing of the MOU agreement is going to bring about a very strong brand as the companies share similar corporate philosophy, orientation and culture and have resolved to enter into the strategic merger in order to increase our market share."
Otegbeye added: "Also with the unveiling of our new corporate identity - Regency Alliance Insurance Plc - the emerging company will benefit from the core competencies of the four, our branch network and clientele base. By the agreement, the combined shareholders, funds of the four companies is over N3 billion, implying that the emerging company has met the new minimum share capital requirement."