News
October 23, 2026
Sanlam’s existing control of Santam is the basis for the parties’ stated position that competition approval is unnecessary for the proposed buyout. The transaction nevertheless remains subject to the takeover regime and the regulatory requirements applicable to insurers, alongside the conditions negotiated between the parties.
The competition enquiry concerns control
Section 12 of the Competition Act 89 of 1998 defines a merger by reference to the acquisition or establishment of control over the whole or part of another business. Control can arise through share ownership, voting rights, board appointment rights or other forms of material influence.
An increase in shareholding does not necessarily create a new acquisition of control. Where a shareholder already exercises sole control, acquiring the remaining economic interest can leave the existing control position unchanged. That is the basis of the position stated in the Sanlam transaction presentation.
The assessment remains specific to the transaction. A move from joint to sole control, or a change to substantive veto rights, can produce a different outcome. Parties need to examine the rights held before and after the acquisition, alongside the applicable notification rules, rather than rely on the percentage of shares being purchased.
Other approvals and payment protection
The Santam scheme remains an affected transaction under the Companies Act 71 of 2008 and falls under the supervision of the Takeover Regulation Panel. It cannot be implemented without the required compliance certificate.
The announced conditions also address approvals from the Financial Surveillance Department of the South African Reserve Bank, the Prudential Authority, the JSE and the Financial Sector Conduct Authority where required. The financial-sector approvals include requirements under the Financial Sector Regulation Act 9 of 2017 and the Insurance Act 18 of 2017.
Payment protection is addressed separately through the bank guarantee furnished to the Panel. The companies’ 14 October 2026 correction announcement confirmed that an updated guarantee covers all scheme shares following the correction to Sanlam’s beneficial holding. Shareholders therefore have the specified guarantee protection if Sanlam Life fails to pay when the scheme becomes unconditional and is implemented in accordance with its terms.
Allocating risk before completion
The parties must also address changes in the business while approvals are outstanding. The Santam scheme includes a material adverse event condition linked to an actual or reasonably expected reduction of at least R1.2 billion in the group’s net asset value on an after-tax basis, subject to the detailed definition and exclusions.
Those exclusions require careful reading. For example, the exclusions for specified changes in economic conditions, markets, laws and accounting standards are qualified by whether the changes were known or had already occurred at signing. They do not provide a blanket exclusion for every later market or regulatory development.
A financial threshold gives the parties a defined measure of materiality. The valuation basis, timing and exclusions determine which risks remain with each party, and can be as significant as the amount itself.
The announcement sets 31 March 2027 as the longstop date for satisfying or, where permitted, waiving the scheme conditions, subject to the agreed extension provisions and Panel approval. Parties planning a transaction should allow for each approval and condition in their timetable, identify who must obtain it, and specify the consequences if it remains outstanding.
This article provides general information and does not constitute legal, financial or investment advice. The proposed transaction remains subject to shareholder and regulatory approvals and other conditions.
