Johannesburg - Saambou, the financial services group, had acquired a 26 percent stake in General Union (GU), the financial services company, after funding a management buy-out of the company from its founder, Octogen, GU`s new holding company, said yesterday.
``We have been working on the Saambou transaction for some time and are happy to announce its finalisation so shortly after the release of Saambou`s excellent financial results last month,`` Philip van den Heever, the chief executive of GU, said.
GU, which concentrates on sectors with limited access to traditional finance houses and banks, has a long-established association with Saambou through its personal loans division.
The recent transaction will allow both companies further expansion into this market.
``General Union`s focus will remain finance and insurance for that market sector, but the transaction and the synergy it offers both companies could lead us to developments for other market sectors,`` van den Heever said.
Sarel Rudd, the chief executive of joint ventures at Saambou, said the transaction made strategic sense for the group.
``General Union has achieved rapid growth in the LSM 5 and 6 segments of the market, a target group with strong brand loyalty towards Saambou.
``We were impressed with the managerial skill at General Union and the company has developed several key strategic relationships that will continue to benefit both companies,`` Rudd said.
Besides personal loans, GU also has interests in insurance underwriting, healthcare, legal aid and personal finance.
Its new holding company is called Octogen Limited, but it will continue its operations with the General Union brand name.
The company has offices in all major centres in South Africa, and said it would expand into other regions of Africa within the next year.
The company also had plans to list on the JSE, but according to Van den Heever, this would only proceed once its key objectives had been achieved.