Insight
October 20, 2026
The commercial case for Sanlam’s proposed Santam buyout rests on what full ownership would add to its existing control. Acquiring the remaining minority interest would allow the group to simplify its structure, reduce duplicated listing costs and gain greater flexibility in allocating capital.
Under the proposal announced on 5 October 2026, Sanlam’s wholly owned subsidiary, Sanlam Life, would pay R505 in cash for each eligible ordinary Santam share. Sanlam’s beneficial holding is 61.9%, excluding treasury shares, as confirmed in the companies’ correction announcement of 14 October 2026.
If implemented, the transaction will make Santam wholly owned within the Sanlam Group and end its separate listings on the JSE, the Namibian Securities Exchange and A2X Markets.
The commercial value of full ownership
A separate listing gives a subsidiary access to investors, a public market valuation and the ability to raise capital in its own name. It also carries ongoing reporting, governance and listing obligations. Where the parent already controls the business, those costs need to be weighed against the benefits of keeping a separate listed investment available.
Sanlam and Santam identify simpler governance and reporting, reduced duplicated listing costs and greater flexibility in allocating capital as reasons for the proposed buyout. They also anticipate closer coordination of the group’s insurance and other financial services.
Full ownership would bring the remaining economic interest in Santam into the group. It would also remove the need to accommodate a separate body of minority shareholders in future ownership decisions. Santam would, however, remain a distinct legal entity with its own regulatory obligations, and its directors would continue to owe their duties to the company.
Acquiring the remaining shares through a scheme
The proposed transaction uses a scheme of arrangement under section 114(1), read with section 115, of the Companies Act 71 of 2008. This provides a mechanism for acquiring the eligible shares collectively, subject to the required approvals and protections.
Under an ordinary offer, shareholders decide individually whether to accept. A scheme that becomes operative binds the affected shareholders, including those who voted against it, subject to statutory remedies such as appraisal rights. That makes a scheme suitable where the commercial objective depends on acquiring the entire remaining interest.
Sanlam cannot use its controlling stake to vote the acquisition through. The applicable voting exclusions remove the acquiring party’s voting rights from the approval calculation. The proposed scheme requires support from at least 75% of the eligible voting rights exercised at a properly constituted meeting, together with the other statutory requirements.
The price of simplifying the group
For the parent company, the decision requires an assessment of the purchase price, funding costs and expected benefits of full ownership. Cost savings alone are only part of that assessment. The group must also consider whether the additional investment supports its capital requirements and longer-term plans.
The minority shareholders approach the same transaction from a different position. Their cash exit brings direct participation in Santam’s future performance to an end. The price and the protections surrounding the transaction therefore carry particular weight.
For other corporate groups, the decision to buy out a listed subsidiary’s minorities begins with identifying what full ownership would enable the group to achieve. The transaction structure must then deliver those benefits at an acceptable cost while respecting the rights of the shareholders being bought out.
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.
