AXA SA purchases 8% stock in Africa Internet Group
AXA SA, an insurance company in France, has partnered with Africa Internet Group to become the sole supplier of insurance products in Africa. Under the terms of the partnership deal, AXA will buy around 8% stock in the Africa Internet Group, AIG, by investing EUR 75 million.
The transaction is subjected to the regular closing conditions and it is anticipated to close in the Q1 of 2016. AIG said that the excess amount donated by AXA will enhance the company's balance sheet and also back up its ongoing development.
Jumia, a primary business unit of AIG, increased its transaction volume by about 265 percent to reach EUR 206 million over the initial 9 month period in 2015. The company said that Jumia enables domestic businesses to perform business activities with the fast developing African communities. Other business products include Hellofood, Jovago, Kaymu, Everjobs, Carmudi and Lamudi.
Other AIG's stakeholders include Rocket Internet, Millicom and MTN. Africa's robust fundamentals like suburbanisation, less penetration rates, youth population and increase in middle class communities have attracted many foreign organisations to invest in their soil.
Sacha Poignonnec, co-chief executive and founder of Jumia, said that the AIG is pleased with the future of Jumia and hope this merger will promote its business. According to Jeremy Hodara, co-CEO and founder of AIG, the online businesses in Africa will continue to grow amid the robust middles class growth as well as increasing internet exposure. This new partnership in insurance services will enable AIG to modernise and link businesses to meet the developing consumer demand in Africa, Jeremy added.
Forbes said that Decatholan, a retailer of sporting goods in France, introduced an online store in Cote d'Lvoire through Jumia last month. Africa serves as a promising market for most insurance firms globally and this transaction will provide AXA SA the access to Africa's high customer base and allow it to grow its financial strength. AXA expects to better serve the African community with their insurance portfolio, according to AXA Deputy CEO, Denis Duverne.
"The offline world, or real world infrastructure in Africa, is simply moving too slowly. You cannot find a real estate company or travel agency or insurance company on every second corner and our online businesses aim to fill that gap", Jeremy Hodara said Bloomberg. Eight analysts at Analysts Ratings.Net have assigned a 'buy' rating for the shares of AXA SA, while one analyst has given a 'sell rating and two have given a 'hold' rating, according to Financial Market News.
With the advent of the internet and mobile phones, Africa has become a dominant location in connecting various businesses with the growing middle-class community. AXA's transaction with AIG will promote its business strategy and help the French insurer to serve the African society with its wide range of insurance products.