AXA, the world’s largest insurer that recently bought majority equity stake in Mansard Insurance Plc, has acquired 18.6 per cent equity stake in Eranove Group, making inroad into utility business in the West African region.
Emerging Capital Partners (ECP), the owner of ECP Africa Fund II which holds the majority equity stake of 55.9 per cent in Eranove Group, confirmed the acquisition on Monday. AXA consummated the transaction through AXA’s Real Estate division, which specializes in real estate and infrastructure. AXA is acquiring the 18.6 per cent residual stake which was held by the Bouygues Group.
Formerly known as Finagestion, the Eranove Group was created when Bouygues combined the African assets of its subsidiary SAUR into a single company. ECP first bought into Eranove’s capital in 2008 and acquired a majority holding a year later.
“Having a top-flight investor like AXA Real Estate on board is great news for Eranove and a great pleasure for ECP,” said Vincent Le Guennou, Co-Chief Executive Officer of ECP and Chairman of the Board of Eranove.
He said with AXA as its new shareholder, Eranove would continue to pursue and broaden its goal of developing and facilitating the population’s access to essential life services.
Eranove currently accounts for almost 70 per cent of installed electricity generating capacity in the Ivory Coast, supplying 1,136 MW via two of its subsidiaries, Compagnie Ivoirienne d’électricité (CIE) and Compagnie Ivoirienne de production d’électricité (CIPREL). CIE operates six hydroelectric and a thermic power station and also manages the transport and distribution network. CIPREL operates one of the country’s most important thermal power stations, where the company is currently completing its expansion through one of the largest infrastructure investments in recent years in the Ivory Coast (EUR 343.6 million). Phase one (111 MW gas turbine) opened in January 2014, while phase two (111 MW steam turbine) should start operation at the end of 2015.
Eranove is also represented in the water sector through Société de distribution d’eau de la Côte d’Ivoire (SODECI) and Sénégalaise des Eaux (SDE), which are by way of delegation of public service, the leading African players in producing and distributing drinking water and sanitation.
Eranove has also focused on expanding across Africa in recent years, winning a technical support contract from Régideso in the Democratic Republic of Congo in 2012 and in June 2015, signing a contract to design, build and operate the hydroelectric power station at Kenié with the government of Mali, through their subsidiary Kenié Energie Renouvable.
Le Guennou noted that in choosing to make its first move into Africa with this transaction, AXA Real Estate has underlined the attractiveness of Eranove Group’s business model adding that Eranove Group has developed sound expertise in a continent whose current annual financial requirements are estimated at more than $40 billion for energy, and more than $20 billion for water and sanitation.
It’s unclear whether AXA involvement in Eranove Group will bring the utility firm into the Nigerian market.
Founded in 2000, ECP is a pan-African private equity firm that has raised over $2 billion for growth capital investing in Africa. ECP has a diversified set of investments with capital deployed in over 40 African countries and in various sectors including financial services, telecommunications, natural resources, agriculture and infrastructure.
AXA had in July 2015 reincorporated Mansard Insurance Plc as AXA Mansard Insurance, to complete the acquisition and brand essence change that started late last year.
AXA had bought 77 per cent majority equity stake in Mansard Insurance Plc, in a major market-entry push that promises to profoundly impact the Nigerian insurance industry. AXA already has a substantial presence in Africa including Cameroon, Gabon, Ivory Coast, Morocco, Senegal and Algeria.
AXA took over the 77 per cent equity stake held by Assur Africa Holding Limited (AAH), the core investor that had purchased the former Guaranty Trust Bank insurance subsidiary. GTBank had sold its insurance subsidiary, Guaranty Trust Assurance Plc, in compliance with regulatory framework of the Central Bank of Nigeria (CBN).
AXA had entered into an agreement to acquire 100 per cent of Assur Africa Holdings, which then held the 77 per cent equity stake in Mansard. AAH is made up of Development Partners International (UK), Africinvest Inc (Tunisia), Netherlands Development Finance Company (Holland), German Investment Corporation (Germany), French Development Finance Company (France) and ASPV Limited.