The proposed merger will see the companies offer unsecured personal loans with embedded credit life insurance.
The Competition Tribunal has unconditionally approved the merger between digital lender TymeBank and Sanlam’s personal loans business.
The transaction will see TymeBank acquire a 50% stake in Sanlam Personal Loans Services, which will be renamed SanlamTyme JVCo, as well as a portion of Sanlam Personal Loans’ existing unsecured loan book, referred to as the “SPL Sale Loan Book.”
The two companies will also provide loan facilities to SanlamTyme, which will be used to fund the origination of new loans.
This merger stems from an announcement in April 2025, in which Sanlam Life, Sanlam Personal Loans, and TymeBank agreed to form a joint venture to offer unsecured personal loans with embedded credit life insurance.
Terms of the deal
Sanlam Personal Loans currently offers fixed-rate personal loans ranging from R5 000 to R300 000, with repayment terms of 12 to 72 months. Its loan book stood at R5 billion as at 31 December 2024.
Under the terms of the deal, TymeBank in which billionaire Patrice Motsepe’s African Rainbow Capital has a controlling stake, will buy 50% of the loan book for approximately R400 million, plus the value of the capital.
In addition, TymeBank will pay around R320 million for a reference share in SPL, giving it the right to half the credit life profits generated by the JVCo loan book.
TymeBank is also paying R31.5 million for its 50% equity stake in JVCo.
Sanlam has described the joint venture as a core component of its credit strategy, namely to grow its stake in the unsecured lending market.
Sanlam noted at the time of the deal announcement that the two companies have complementary customer bases and skillsets, offering growth opportunities.
Cross-selling opportunities
The merger enables both companies to gain access to each other’s customer bases and platforms.
Sanlam will benefit from TymeBank’s digital infrastructure, including its fraud management systems, while TymeBank will gain a foothold in a more established lending operation and tap into Sanlam’s large customer base.
Both parties have indicated that the joint venture presents cross-selling opportunities.
The long-stop date to complete the transaction is set for 31 March 2026.
With the Tribunal’s approval, the first regulatory hurdle for the transaction has been cleared.
Approval from the South African Reserve Bank’s Prudential Authority is still pending.
Ninety One deal awaiting SA approval
Sanlam has also recently agreed to enter into a 15-year strategic relationship with asset manager Ninety One.
Under the proposed transaction, Ninety One is set to acquire all the issued shares in Sanlam Investment Management, while Sanlam will, in turn, receive a 12.3% stake in Ninety One.
Ninety One will also become the primary active asset manager for the assets held on the balance sheet by Sanlam Life and Sanlam Developing Markets Limited.
The transaction between Sanlam and Ninety One is still subject to regulatory approval in South Africa, while the UK component of the partnership has been completed.
Sanlam previously stated that it expects all approvals to be finalised by the end of 2025.
Source: Moneyweb
