Globe/British American merger set for first half 2002

Globe Financial Management yesterday provided further details of its proposed merger with British American Insurance. The agreement would see Globe taking over the gauntlet of British American’s local operations in return for an allocation of shares in Globe. The share transfer is expected to effectively make British American a significant shareholder of Globe.

As part of the merger deal, British American will transfer its life insurance business, its majority shareholding in BUPA Malta and its 50 per cent stake in Britam Limited – a property holding company - to Globe.

Both companies are listed on stock exchanges, Globe on the Malta Stock Exchange and British American on the Mauritius Stock Exchange.

The merger is interesting in that it will be uniting two companies acting in the financial services field, although they operate in different sectors. It is expected that the joining of their operations will see synergies capitalised upon, while opening up a capacity for a wider range of services and growth prospects in both existing and future activities.

Globe chairman, Christopher Pace, speaking yesterday said that the impending merger of the two operations will widen the client base of both operations, while also increasing their market potential to the benefit of both the clients and the shareholders. Mr Pace will remain as chairman of the merged operation.

While the merger is still subject to regulatory approval and administrative procedures, it is expected to be finalised during the first half of next year.

Mr Pace is enthusiastic about the development, as he explains, "This is a very significant and exciting move, which we are confident will prove beneficial to both companies and, ultimately, to our shareholders. Through this merger, we will be able to diversify our operations and create new revenue streams.

"As a merged operation, we shall be able to tap into the significant synergies that both parties will bring to the larger set-up. There will also be economies of scale."

Equally optimistic is Dawood Rawat, chairman of British American Holdings, who was recently in Malta to finalise the merger agreement. He comments, "Our alliance with Globe Financial Management plc is potentially exciting. There will be opportunities for growth in Malta and the region. Globe Financial Management is an ideal partner for us, as its business complements our own, and both parties have much to offer in financial services and healthcare."

The British American group has offices in London, Washington, the Bahamas, Kenya, Mauritius and India, besides Malta. The Malta office currently operates as a branch of British American Mauritius. Before the merger, it will be set up as an autonomous company, registered in Malta. After that, its business and that of BUPA Agencies Ltd, which is at present a subsidiary of British American Mauritius, will merge with Globe Financial Management plc.

British American’s Malta office sells life and health insurance. BUPA Agencies is the Malta agent for BUPA International, the UK-based health insurer. These businesses have a joint complement of 37 employees.

British American has been operating a branch in Malta since 1965 and has built up a portfolio of life and related insurance cover for its Maltese clientele.
In 1997 it secured a majority shareholding in BUPA agencies Malta and the merger will encompass all these aspects of British American’s business. British American also holds a 50 per cent stake in Britam Limited, a property owning company set up earlier this year.