Controlled by Kenya’s richest men, Britam Holdings completes sale of $121-million stake in Equity Group

Britam Holdings, a leading insurance firm controlled by Kenyan multimillionaire businessmen Peter Munga, James Mwangi and Jane Wanjiru Michuki, has completed the sale of a 6.7-percent stake in Equity Group, Kenya’s largest commercial bank, to the International Finance Corporation (IFC).

The Kenyan insurance company received a whopping Ksh14 billion ($121 million) from the IFC, a member of the World Bank Group, in exchange for a 6.7-percent stake in Equity Group Holdings, a leading financial services group with active operations across East and Central Africa.

The transaction, which was announced nearly four months ago, was completed following regulatory approvals from regulatory authorities such as the Central Bank of Kenya and the Nairobi Securities Exchange (NSE).

Prior to the transaction, Britam had been selling shares in Equity on the open market in order to diversify its portfolio and comply with regulatory guidelines that limit investment in a bank to 10 percent of an insurer’s total assets.

Following the completion of the recent transaction, IFC joined a long list of shareholders in the Kenya-based financial services group, including Arise B.V., Stanbic Nominees, and Mwangi, Equity Bank’s CEO.

The sale of the 6.7-percent stake in the Mwangi-led Equity Group will see the Kenyan insurer cap significant gains from one of its most successful investments as it seeks to boost its earnings after exiting a loss position in the first half of 2021.

According to sources familiar with the transaction, the premium on the deal with the IFC will see the Kenyan insurer and investment group increase its profits by approximately Ksh1.5 billion ($13.3 million) during the current reporting period.

The proposed investment strengthens IFC’s relationship with Equity, of which it is the sole creditor. As of December 2020, the global financier had lent the bank Ksh21.8 billion ($188 million), leading a list of development finance institutions that had backed the lender’s aggressive regional expansion.

Britam Holdings is a leading insurer and financial services provider with operations in Southern and East Africa. Insurance, asset management, banking, and real estate are among its financial services.

Munga is a non-executive director at Britam and a co-founder and former chairman of Equity Group Holdings. He owns approximately 72 million shares of Britam.