EFG Hermes, GB Auto complete majority stake acquisition of Tokio Marine Egypt

CAIRO - 27 August 2020: EFG Hermes through its Non-bank financial institution (NBFI) EFG Hermes Finance Holding and GB Auto through its NBFI GB Capital announced Thursday the completion of a 75 percent stake acquisition in Tokio Marine Egypt Family Takaful, in a deal worth LE 84.75 million.

According to a filing to the Egyptian Exchange (EGX), EFG Hermes Finance and GB Capital will each hold a stake of 37.5 percent of the company. Tokio Marine Group, a world-renowned leader in insurance and reinsurance and the largest general insurer in Japan will own the remaining 25 percent.

Tokio Marine Egypt Family Takaful offers individual and corporate clients a variety of insurance solutions. The acquisition considerably expands the scope and reach of EFG Hermes’ and GB Auto’s respective NBFI offerings, providing a platform from which to widen and deepen EFG Hermes’ and GB Auto’s exposure to various market segments, the acquisition will be leveraged to complement the companies’ respective existing NBFI operations through the introduction of innovative insurance products.

The statement noted that Egypt’s insurance industry remains significantly underpenetrated compared to regional and global peers. The sector is set to benefit substantially from the government’s focus on financial inclusion, as well as from significant efforts to establish a more favorable regulatory framework. 

Against this backdrop, EFG Hermes’ and GB Auto’s entering into the industry promises to generate substantial value as it expands in line with expectations for emerging markets.

“We are very pleased with the completion of this transaction and excited for the prospects of exploring the full, and yet untapped, potential of this industry and market. We know the Egyptian life insurance industry is primed for significant growth and profitable expansion, and we intend to capitalize on that. As such, the move aligns perfectly with our vision for the future, which sees our subsidiary business expanding as we diversify our portfolio of offerings in the leasing, consumer finance, factoring, micro finance, mortgage finance, securitization, fleet- leasing arenas and e- payments to cater a wider segment of clients, both corporate and individual,” , Chairman and CEO of GB Auto (AUTO on the EGX) Raouf Ghabbourcommented.

For his part, Group CEO of EFG Hermes Holding Karim Awad said that the completion of this acquisition is a definitive milestone in EFG Hermes’ strategy to offer the Egyptian market a comprehensive suite of NBFI services. In four years, we were able to not only grow our traditional lines of business, but also introduced leasing, microfinance, consumer finance, Fintech, factoring, digital payments, mortgage and insurance.

Coinciding with the transaction, Tokio Marine Egypt Family Takaful – which will be relaunched under a new brand in the coming months – has appointed Sohail Ali as chief executive officer.

With over two decades of insurance experience across multiple markets, Ali will lead the company to establish a comprehensive suite of innovative insurance products and services.

In 2015, EFG Hermes launched the NBFI Platform, EFG Hermes Finance, which overlooks activities in the non-banking finance field through EFG Hermes Leasing, Tanmeyah Microfinance, valU for instalment sale services and EFG Hermes Factoring, in addition to newly-launched entities covering digital payments, insurance and mortgage.