Discovery in Multi Billion Rand Acquisition Deal

In one of the biggest acquisition deals in the insurance industry this year, Discovery Holdings announced that it is to purchase the United Kingdom's fourth biggest private medical insurer, Standard Life Healthcare.

Discovery, which owns South Africa's biggest medical insurance administrator, will be paying R1.56 billion for the acquisition.

According to the group, Standard Life Healthcare will be integrated with Discovery's joint venture in the UK with Prudential Assurance through its Prudential Health arm.

The joined platform will offer coverage to 700,000 UK residents in the private medical insurance market.

This should yield premiums worth R4.1 billion.

Discovery Holdings believes that the UK private health care market is set to grow as the government plans on cutting spending on public health.

"We think the UK has got great opportunities," said the Chief Executive Officer of Discovery, Adrian Gore. "The National Health Insurance is going to see budget cuts."

The CEO also noted that the group would not need to raise capital to make the acquisition, and would do so by using internal resources.

This was due to the fact that growth in the South African insurance market remained "incredibly strong," according to Gore.