By Elliot Williams & Evans Boah-Mensah

The National Insurance Commission (NIC) has given its approval for Provident Life Assurance to be sold to South African firm Old Mutual Plc for a consideration that runs into several millions of dollars.

The approval by the national insurance regulator is a significant milestone in completing a deal that has been agreed in principle by the two parties. It will enable Old Mutual to acquire a majority stake in Provident Life.

B&FT learnt that the NIC gave its backing to the sale agreement after completing due diligence on the South African firm, paving the way for the takeover deal to be closed as soon as the Financial Services Bureau (FSB) of South Africa also gives its approval.

The parties are however yet to agree on the stake that Old Mutual Plc will have to acquire.

?We are confident the deal will go through by the end of this year. NIC has given the green light and it is left to the FSB. As of now, we don?t know how much Old Mutual will pay for the takeover since we have yet to agree on the number of shares Old Mutual will take — even though we have agreed they will take a majority stake,? the source said.

The takeover of Provident Life Assurance forms part of Old Mutual?s pan-African expansion drive. Old Mutual, which is headquartered in London with South-Africa as its administrative office, has already sent one of its key personnel to Ghana, who has begun the integration process for the takeover.

Tomorrow, a high-powered delegation of the company led by its Deputy Managing Director will be in the country to hold meetings with the NIC, Bank of Ghana, the Vice President and other government officials in the financial services sector.

It is understood that there will be no significant retrenchment after the takeover. The only casualty of the deal, who is now certain to leave Provident Life on completion of the acquisition, is the founder and CEO, Wilson Tei.

?Old Mutual is now in the market for a young CEO to manage its operations in Ghana. The current CEO, who has passed the mandatory retirement age, is certain to leave the company and he is the only one we know will be retired from the company,? the source added.

B&FT further gathered that Old Mutual agreed to buy into Provident Life Assurance following the latter?s growth potential and encouraging financial performance.

The turnover of Provident Life last year stood at US$15million, down from the US$16million that it made in 2011.

It is expected that Old Mutual?s takeover of the company will boost its financial performance.

The South-African firm has set aside about US$500million to spend on its operations in Africa over the next five years. The Old Mutual Group, which made profit after tax last year of ?1.17billion, also acquired Oceanic Life in Nigeria in February this year and is hoping that its acquisition in Ghana will help the firm to gain scale in the region.

The company also operates in seven other African countries including South Africa, Kenya, Malawi, Swaziland, Zimbabwe, Botswana and Namibia.

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