Financial due diligence

Financial and Tax due diligence services for a landmark joint venture between two leading multinational insurers, uniting their insurance businesses across Africa 

Two leading multinational insurers procured PwC to provide financial and tax due diligence services for a USD 2.1 billion deal on back of a proposed joint venture of the companies’ insurance businesses across Africa. The joint venture was designed to leverage varying yet mutually enhancing strengths, global expertise and strong local presence, and the due diligence exercise covered 19 individual operating companies across 5 countries (Kenya, Uganda, Tanzania, Zambia and Mauritius). 

Our approach covered:

• Analysis of annual trends of the individual operating companies based on the audited financial statements and management accounts. 
• Identification of red flags and key issues, assessing potential deal breakers regarding the transaction. 
• Analysis and adjustment of the quality of earnings of the individual entities. 
• Analysis and adjustment of the quality of assets of the individual entities. 
• Analysis and adjustment of the quality of debt and working capital of the individual entities.

Our analysis culminated in a financial and tax due diligence report that led to the close of the transaction. The transaction was recognized at the IFLR Africa Awards in 2024 for its scale, impact, strategic value, financial strength, market leadership and broader implications on the insurance market in the region. 

• Scale and impact: The joint venture created one of the largest pan-African non-banking financial services institution, operating in 27 countries across the continent.
• Strategic value: It consolidated the operations of two leading insurers, combining one partner’s regional expertise with the other’s global reach, aiming to boost insurance penetration, innovation, and financial inclusion.
• Financial Strength: The deal was valued at US$2.1 billion, with a projected equity base of R35 billion. 
• Market leadership: The merged entity holds a top-three position in market share and profitability across its operating regions.
• Broader implications for Africa: The merger presented opportunities such as insurance innovation through digital transformation (e.g., mobile based insurance solutions tailored to specific markets and their unique needs, as well as economic development backed prospects of job creation and improved investor confidence).