FCMB’s Planned Acquisition of AIICO Pensions Excites Market
By Adedapo Adesanya
The FCMB Group and AIICO Insurance Plc have confirmed holding discussions for the sale of 96 percent stake jointly held by the latter in AIICO Pensions Managers Limited to FCMB Pensions Limited.
The parties confirmed the negotiations in separate notifications to the Nigerian Stock Exchange (NSE) on Friday, June 26, 2020.
The proposed transaction is, however, subject to the approvals by the appropriate regulatory agencies, namely the National Pension Commission (PENCOM) and the Federal Competition and Consumer Protection Commission (FCCPC).
The statement by the FCMB Group, which was signed by Mr Kayode Adewuyi, Chief Financial Officer and Mr Ladi Balogun, Group Chief Executive Officer, said the proposed acquisition would make AIICO Pensions Ltd an indirect subsidiary of FCMB Group.
They said both organisations had entered into discussions with shareholders of AIICO Pension Managers to acquire the 70 percent stake held by AIICO Insurance and 26 percent held by some other shareholders in the pension fund administrator.
“We shall notify the NSE and the investing public once the relevant approvals for the transaction are received,” it said.
Similarly, AIICO, in a statement signed by the Company Secretary, Mr Donald Kanu, said at the conclusion of the proposed sale, AIICO Pensions shall cease to be a subsidiary of AIICO Insurance Plc.
“The proposed sale is AIICO’s stake of 70 per cent and other shareholders stakes of 26 per cent thus bringing the cumulative sale of 96 percent stake to be purchased by FCMB Pensions,” Mr Kanu said.
He said that the company would notify the exchange and stakeholders once the relevant approvals for the transaction were received.
Business Post reports that when this news was announced to the investing community, the market received it with joy.
It was observed that the stock exchange, which had been in the red territory for over five trading sessions, appreciated by 0.83 percent last Friday.
Already, investors are eyeing shares of FCMB at the market, with the hopes that this proposed acquisition will boost the stock in the coming days and weeks.
In an analysis by Business Day, AIICO Pensions made N317.3 million and N219.4 million as profit after tax in 2017 and 2018 respectively representing 0.7 percent and 0.4 percent of the industry profit in those years while on the other hand, FCMB Pensions made N1.03 billion PAT in 2018 and N879.5 million PAT in 2017 to account for 2.1 percent and 1.8 percent of the industry profit respectively in those years.
This means that when the acquisition is completed, FCMB Pensions’ contribution to industry profit will increase to 2.5 percent.