RMH Holdings to Buy Stake in OUTsurance

December 24 - It was announced last week that RMB Holdings will be buying a stake in the South African property and casualty insurer, OUTsurance, belonging to FirstRand Ltd.

RMB paid R3.75 billion to FirstRand and intends splitting its own insurance and banking businesses.

RMBH owns 30% of FirstRand and 45% of OUTsurance.

The group said that it would be creating a new insurer, to be known Rand Merchant Insurance Holdings.

The new insurance entity will be listed on the Johannesburg stock exchange.

RMBH will be selling 5% of its stake in Royal Bafokeng Holdings towards paying for the OUTsurance acquisition for R2.5 billion.

The Chief Executive Officer of RMBH, Peter Cooper said that these transactions would "provide investors with greater flexibility in terms of their investment choices by giving them separate access to an enhanced portfolio of pre-eminent insurance brands, as well as a strategic investment in a premier Southern African banking group."

In a separate statement issued by FirstRand, the group said that it would be using the money that it obtained from the sale of the 45% stake in OUTsurance to "either support further investment in the available growth opportunities or be returned to shareholders."

RMBH continues to raise its stakes in South Africa's insurance businesses. It already owns 25% of Discovery Holdings and wants to raise its interests in MMI Holdings from 18% to 24%.