CAIRO, EGYPT: EFG Hermes announced 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 EGP 84.75 million.

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, a world-renowned leader in insurance and reinsurance and 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 (AUTO on the EGX) commented: “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.

We are honored to partner with EFG Hermes and Tokio Marine Group and are confident that our new relationship represents the natural progression of our already established, expansive and fast-growing NBFI portfolio of offerings in the leasing, consumer finance, factoring, micro finance, mortgage finance, securitization and fleet-leasing arenas.”

Commenting on the agreement, Karim Awad, Group CEO of EFG Hermes Holding (HRHO on the EGX) said, “The Egyptian insurance market is largely under-penetrated compared to its potential, with premiums as a percentage to 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. As such, this partnership not only comes at the perfect time, but falls perfectly in line with our strategy to continue expanding our NBFI offering. Our NBFI footprint today encompasses leasing, microfinance, fintech-enabled consumer finance, mortgage finance, factoring and securitization. We can think of no better partner with whom to move forward on this than GB Capital and Tokio Marine Group.”

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 NBFI market, capitalizing on their market strength and extensive experience both individually and as partners in the mortgage finance space. In April, EFG Hermes Finance, GB Auto, and TMG Group entered into an agreement to create Bedaya, a mortgage finance joint venture serving Egypt’s large, growing population of homebuyers.

Edited by Kiran Khan