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South Africa’s biggest insurer Sanlam said on Friday it would take a minority stake, worth $51-million, in a new subsidiary being set up by billionaire Patrice Motsepe’s African Rainbow Capital Financial Services (ARC FS).

Sanlam will take a 25% stake in the subsidiary which will hold ARC FS’s financial assets including financial services group Alexander Forbes, but excluding its banking related investments, namely start-up, digital-only lender TymeBank.

The deal is one of a series of planned transactions with ARC FS first laid out by Sanlam in 2018 and intended to promote Black-economic empowerment – a South African government policy that encourages companies to meet quotas on Black ownership, employment and procurement to reverse decades of racial exclusion under apartheid.

Sanlam said its 25%, non-controlling stake in the new unit of ARC FS, part of Motsepe’s Ubunto-Botho investments group, was worth R739-million as of June 30, and that it would fund the stake purchase from existing resources.

The deal follows another transaction between ARC FS and Sanlam earlier this year to form the country’s largest black-owned asset manager.

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