Just over a decade after divesting a controlling stake in First Assurance to Barclays Africa, a group of investors associated with Prime Cabinet Secretary Musalia Mudavadi is preparing to reacquire the insurance company from Absa in a transaction projected to be valued at a minimum of Ksh3.8 billion.
This proposed deal marks a remarkable turnaround in the ownership narrative of one of Kenya’s oldest insurance firms: the very investors who sold First Assurance in 2015 are now positioned to reclaim control from the institution that succeeded Barclays Africa.
At the heart of this transaction lies First Assurance Investments Limited (FAI), an investment vehicle connected to Mudavadi.
Reports indicate that Absa Group holds a 63.3 percent stake in both First Assurance Company Limited and Absa Life Assurance Kenya. Sources familiar with the transaction reveal that the banking group is seeking at least Ksh3.8 billion for these two holdings. Public registry searches confirm that FAI is 52.5 percent owned by Syndicate Nominees, a company Mudavadi publicly acknowledged during his 2022 vetting for the Prime Cabinet Secretary position. Exclusive Holding Limited, an investment firm with roots in Mombasa, owns the remaining 47.5 percent.
To fully appreciate the significance of this proposed buyback, we must revisit the events of 2015.
First Assurance has been a longstanding player in the Kenyan insurance market since 1930, initially operating as Prudential Assurance Company PLC. It transitioned to a wholly Kenyan-owned entity in 1991 and adopted the name First Assurance.
In 2015, Barclays Africa Group Limited acquired a 63.3 percent controlling stake in First Assurance, thus becoming the majority shareholder in a transaction valued at approximately Ksh2.2 billion, according to Mudavadi’s subsequent wealth disclosures. Mudavadi and other investors were among those who sold their controlling stake to Barclays Africa.
This transaction shifted ownership of First Assurance from a group of Kenyan investors to one of Africa’s leading banking groups.
Three years later, the corporate identity of the majority owner underwent another transformation.
In 2018, Barclays Africa Group rebranded as Absa Group, as part of a broader strategic initiative. First Assurance continued to operate within the Absa Group framework, and the company’s corporate history reflects Barclays’ 2015 acquisition and the subsequent transition to Absa ownership.
The shares that Mudavadi and his partners sold in 2015 ultimately became part of Absa’s Kenyan insurance portfolio.
Now, 11 years post-sale, this ownership network is actively seeking to reacquire its stake.
Mudavadi’s connection to First Assurance is well-documented.
During his 2022 vetting for the Prime Cabinet Secretary role, Mudavadi disclosed ownership of First Assurance shares valued at approximately Ksh440 million, held through two investment vehicles. He reported about Ksh255 million in First Assurance investments through First Assurance Investment and another Ksh185 million through Syndicate Nominees.
Additionally, Mudavadi disclosed an investment of approximately Ksh545 million in Absa Bank, which is separate from his interest in First Assurance.
These disclosures provide vital insights into the ownership structure, as Syndicate Nominees is now recognized in public registry information as a significant shareholder of First Assurance Investments, the vehicle central to the proposed acquisition.
Understanding the ownership structure behind the buyback is crucial.
Recent reports indicate that First Assurance Investments is 52.5 percent owned by Syndicate Nominees, which Mudavadi publicly identified as one of the vehicles through which he holds his First Assurance investment. The remaining 47.5 percent is held by Exclusive Holding Limited, as reported in connection with the proposed transaction.
This ownership structure is noteworthy because it signifies that the proposed buyer is not merely an unrelated investor entering the insurance market. Instead, the investment vehicle has ties to shareholders with a historical connection to First Assurance, making this transaction a potential corporate homecoming.
For Absa, this proposed sale aligns with broader strategic considerations regarding the role of insurance within its banking operations. By divesting its controlling stakes in First Assurance and Absa Life Assurance Kenya, Absa can focus more intently on its core banking functions.
For the buyers, this transaction presents a valuable opportunity to regain control of a business with a rich legacy in Kenya. First Assurance, established in 1930, boasts a diverse insurance portfolio catering to both corporate and individual customers. The company positions itself as a provider of insurance and integrated financial services, supported by a nationwide branch network that spans key cities including Nairobi, Mombasa, Nakuru, Kisumu, Nyeri, and Eldoret.
