Further to the appointment of Stanbic IBTC Stockbrokers Limited (“SISL”) as the Stockbrokers to the Merger between Tangerine Life Insurance Limited and ARM Life PLC. we wish to inform you of the following:
Background and brief summary of the Merger
Tangerine Life Insurance Limited (“Tangerine Life”) has continued to explore strategic options to strengthen its positioning in the Nigerian insurance industry. Following an assessment of the industry, the Boards selected ARM Life PLC (“ARM Life”) as a suitable partner given its strong presence in the retail and annuity segments of the insurance industry, as a complement to Tangerine Life’s strong presence in the corporate segment. In March 2020, Tangerine Life completed the acquisition of a 77.22% equity stake in ARM Life and acquired a further 1.05% equity stake through the subsequent mandatory take-over offer incompliance with the law and regulations, bringing its total shareholding in ARM Life to78.27% as at the date of the Scheme document.
The National Insurance Commission (“NAICOM”) stipulated an increase in minimum capital requirements for life insurance, general insurance, composite insurance and reinsurance companies with a two-step target timeline of 31 December 2020 and 30 September 2021. Specifically, the life insurance license capital requirement was increased from ₦2 billion to ₦8 billion. Life insurers are expected to have a minimum capital of ₦4 billion by 31 December 2020 and ₦8 billion by 30 September 2021.
The recapitalization in the Nigerian insurance industry is expected to impact the competitive landscape of the insurance industry. As such, the Boards of Tangerine Life and ARM Life have had discussions and agreed to a proposal to merge both companies into a single legal entity (“Proposed Merger”). The Proposed Merger provides an opportunity to enhance the operational efficiencies of both companies in order to maximize value to all shareholders.
The Proposed Merger is expected to improve the positioning of the Enlarged Tangerine Life in the life insurance sector, creating a stronger player with a larger retail footprint, an adequately capitalized balance sheet, and an increased underwriting capacity. The Enlarged Company will also benefit from operational synergies and administrative efficiencies.
Summary of the proposal
The proposal is for a merger between Tangerine Life and ARM Life. The Proposed Merger will be implemented through a Scheme of Merger between Tangerine Life and ARM Life in accordance with Section 711 of CAMA (the “Scheme”). Under the Scheme, all the assets, liabilities and undertakings, including employees, real property and intellectual property rights of ARM Life will be transferred to Tangerine Life.
As consideration for the transfer, Tangerine Life will offer the other shareholders of ARM Life (“ARM Life Shareholders” or “Scheme Shareholders”) cash of a sum of ₦0.70 for every share held in ARM Life (“Scheme Shares”). ARM Life’s Shareholders can also elect to receives hares in Tangerine Life in the ratio of 8 (eight) shares in Tangerine Life for every 100 (hundred)shares held in ARM Life. Upon the implementation of the Scheme, ARM Life will be dissolved without being wound up and its shares will no longer be tradable on the NASD OTC.
Please be guided accordingly.
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