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The family of the late Central Bank of Kenya governor Philip Ndegwa will pay Sh8.5 billion, or about $66 million, to buy back a 24.1% stake in ICEA Lion Insurance Holdings, regaining sole ownership of one of East Africa's largest insurance groups.
First Chartered Securities, the family's investment company, has received approval from the Competition Authority of Kenya to buy the stake from Eastern Africa Holdings, the vehicle through which LeapFrog Investments and US insurer Prudential Financial have held it, Business Daily reported on Monday. First Chartered already owns the other 75.9%.
ICEA Lion provides life and general insurance, as well as asset and fund management, through subsidiaries in Kenya, Uganda and Tanzania.
The stake is held through LeapFrog Strategic Africa Investments, a $350 million fund that LeapFrog and Prudential set up in 2016 to invest in African insurers. Neither LeapFrog nor Prudential has disclosed the sale price publicly. Prudential announced earlier this year that it planned to sell its stake.
Buying back at more than three times the price
The deal brings back a stake the family sold five years ago. In 2020, the Ndegwas agreed to sell the 24.1% holding to LeapFrog for Sh2.4 billion, in a transaction that valued ICEA Lion at Sh10 billion.
At Sh8.5 billion for the same 24.1%, the buyback implies a value of about Sh35 billion for the whole company, more than three times the price at which LeapFrog came in, according to Billionaires.Africa calculations. The deal gives LeapFrog and Prudential a profitable exit after about five years, in line with LeapFrog's usual approach of buying into African financial companies, holding them for several years and then selling.
When LeapFrog first invested, ICEA Lion's chairman, James Ndegwa, told staff the group would gain access to the capabilities of both LeapFrog and Prudential Life as it sought to grow. James Ndegwa still chairs the board, and his brother Andrew Ndegwa also sits on it.
A family empire built over five decades
Philip Ndegwa, who led the Central Bank of Kenya, founded First Chartered Securities in 1974 with 20 other shareholders. Under his sons, James and Andrew, the company has grown into the holding vehicle for a portfolio that spans banking, manufacturing, real estate, logistics and insurance.
The family has a long record of reshaping that portfolio through mergers, acquisitions and sales. ICEA Lion itself was formed through the merger of ICEA and Lion of Kenya Insurance.
The Ndegwas are also among the largest shareholders in NCBA Group, one of Kenya's biggest banks. NCBA was created through the 2019 merger of NIC Bank, which the Ndegwa family led, and Commercial Bank of Africa, controlled by the family of Kenya's first president, Jomo Kenyatta.
The ICEA Lion buyback reverses the family's earlier move to bring in a foreign partner. With full ownership restored, First Chartered will control the group outright as competition in East Africa's insurance market increases.
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