EFG Hermes, through its non-banking financial arm EFG Hermes Finance Holding, and GB Auto, through GB Capital, have announced their entry into a definitive sale and purchase agreement (SPA) to acquire a 75% stake in life insurance player Tokio Marine Egypt Family Takaful in a deal worth EGP84.75m ($5.3m).
Under the agreement, which is subject to regulatory approval, EFG Hermes Finance and GB Capital will each own 37.5% of the company.
Tokio Marine Egypt Family Takaful is owned by Japan-based Tokio Marine Group, the largest general insurer in Japan. The company offers individual and corporate clients a variety of solutions covering health and life insurance needs.
Dr Raouf Ghabbour, chairman and CEO of GB Auto, said, “We know the Egyptian life insurance industry is primed for growth, with significant untapped potential for rapid and profitable expansion. Given these promising conditions, we have decided to grow our business in this lucrative space while enhancing the sophistication and size of the market to the benefit of all players.”
Commenting on the agreement, Mr Karim Awad, group CEO of EFG Hermes Holding, said, “The Egyptian insurance market is largely under-penetrated compared to its potential, with premiums as a percentage of GDP still in the single digits. Thanks to an improving economic outlook, capital regulations focused on insurance penetration, and wider financial inclusion, Egypt’s insurance industry is poised for substantial growth in line with the kind of growth anticipated for other emerging markets.”
The partnership will see EFG Hermes Finance and GB Auto work together with Tokio Marine Group to develop and enhance Tokio Marine Egypt Family Takaful’s life insurance offering. It will add innovative products to establish a comprehensive suite of life and medical insurance solutions geared toward owners of various asset classes — be they automotive owners, home-owners or otherwise — to capitalize on cross selling opportunities within both EFG Hermes Finance and GB Auto’s NBFI portfolios.
EFG Hermes Finance and GB Auto bring to the table unique capabilities in the non-banking financial services market, capitalising on their market strength and extensive experience both individually and as partners in the mortgage finance space.