In 2004, a broad-based black empowerment consortium led by businessman Patrice Motsepe bought a 10% shareholding in Sanlam, in what was to become one of the most far-reaching black empowerment transactions to date.
The Ubuntu-Botho* deal brought together various stakeholders that would empower small businesses at even the most rural level, through access to capital, business expertise, and helping them grow their businesses via a network of cross-selling opportunities.
The success of the venture has been remarkable – while the Ubuntu-Botho deal has contributed to a significant increase in Sanlam's share price, this far-sighted venture has helped us fast-track our transformation into a truly representative South African company.
Sanlam Group CEO Johan van Zyl said of the transaction that it represents Sanlam's firm commitment to meaningful transformation. "It represents the opportunity to service new and growing markets and to harness the full economic power of our diverse society."
Patrice Motsepe, Ubuntu-Botho chairman, says the value of the transaction is that it provides an opportunity for Ubuntu-Botho to participate in and contribute to making Sanlam the leading financial services group in South Africa. "Poor and unemployed South Africans will also benefit from the transaction through the Sanlam Ubuntu-Botho Community Development Trust."
The UB TransactionThe Ubuntu-Botho transaction was structured in such a way that it would extend Sanlam shareholding to grassroots level, through the Ubuntu-Botho consortium. The UB Transaction
Transaction ChronologyThe Ubuntu-Botho transaction is marked by a series of shareholder events that date back to 2004 and which preceded the actual transaction itself. Transaction Chronology
Shareholder BenefitsSince the UB transaction extends its shareholding to micro- and small businesses, it gives Sanlam credible access to a significantly expanded base of potential customers. Shareholder Benefits
Immediate GainsNews of the Ubuntu-Botho deal was extremely well received. It contributed to a significant increase in Sanlam's share price, which translated into a considerable capital gain for the new shareholders within two years. Immediate Gains
Exceeding BEE RequirementsWith Ubuntu-Botho, Sanlam has managed to exceed the stipulations of the Financial Services Charter (FSC). Exceeding BEE Requirements
Communication to ShareholdersCommunication to Shareholders
Value-Add CalculationThe Ubuntu-Botho (UB) transaction provides for the issue of deferred shares which will increase in value over time, based on a formula linked to the growth in Sanlam's new business. Value-Add Calculation
Contact UsIf you’d like to find out more about Ubuntu-Botho, contact Lebogang Monyatsi or Amandla Dougan. Contact Us