Sanlam, South Africa's second largest insurer, has announced plans to buy financial services firm African Life Assurance for approximately ZAR2.4 billion.

Sanlam’s offer amounted to ZAR22.05 per African Life share, with an additional 0.45 cents per share providing a deal to dispose of African Life Health, the company’s health insurance unit, becomes unconditional by February next year.

Commenting on the transaction Johan Van Zyl, Sanlam chief executive said, Acquiring African Life will provide Sanlam with a meaningful presence from which to consolidate and accelerate our existing offering in this segment…This is a revenue-enhancing acquisition and Sanlam is confident that acquiring African Life will improve our earnings and return on embedded value.

Jeremy Rowse, chief executive of African Life, said that Sanlam’s offer came at a fair price and would build on the company’s existing vision of its business. Following the acquisition, African Life will become a wholly owned subsidiary of Sanlam

In a joint statement, the two groups also revealed that African Life had received an offer from the Momentum Group Limited to acquire African Life for ZAR176 million. However, if the Momentum transaction fails to become unconditional by 15 February 2006, a committee of the current African Life Board will pursue the disposal of ALH to a third party for an amount in excess of ZAR130 million.