Global insurance brokerage firm AON has finally exited Africa, selling off its entire shareholding in 10 subsidiaries to South African private equity company CapitalWorks.
The move signals the decreasing influence of multinationals on the continent, after the 2008 global financial crisis left many firms seeking financial support from their respective governments.
Under the new arrangement, UK-headquartered AON will continue serving its global clients through an agency relationship with the newly branded Minet Holdings Africa Ltd, which will become AON's largest global network correspondent.
"Since the financial crisis on Wall Street, there has been tight regulation and supervision of multinationals by parent companies and the sanctions are so stringent that to put together an infrastructure to comply with these rules is expensive," Joseph Onsando, chief executive of Minet Holdings Africa told The EastAfrican.
"As a result, these foreign companies find it convenient to relinquish the ownership and management of their subsidiaries to the locals."
Kenya, Uganda and Tanzania are among the countries that AON has ceased operations in. Others are Zimbabwe, Malawi, Lesotho, Namibia, Angola, Mozambique and Swaziland.
AON Group owned a 60 per cent shareholding in AON Kenya, a 100 per cent shareholding in AON Uganda and a 50 per cent stake in AON Tanzania. All the shares have been transferred to South African PE firm CapitalWorks.
CapitalWorks focuses on acquiring mid-sized companies involved in manufacturing and value-added distribution and business services.
The transaction that sealed AON's exit from Africa was concluded on November 6, with CapitalWorks allowing six subsidiaries -- Kenya, Uganda, Zimbabwe, Malawi, Lesotho and Nambia -- to be rebranded as Minet.
Tanzania, Angola, Mozambique and Swaziland will be rebranded by February 2018 after receiving approvals from their respective governments.
"As Minet, we have a huge number of clients that we shall continue to serve," said Mr Onsando.
Minet Group plans to expand further in Africa, leveraging on technology and innovation.
AON's exit from Africa is the latest in a series of equity transactions that have seen multinationals exit or scale down their operations on the continent and other emerging markets following the tightening of regulatory rules by their parent companies.
Last year, US multinational AIG announced a similar plan to exit from "smaller" markets abroad, starting with Uganda.
AIG also said that it would sell off its Latin American and Eastern European businesses to Canadian company Fairfax Financial Holdings Ltd.
AIG was bailed out by the US government during the 2008 financial crisis, the worst ever economic disaster since the Great Depression of 1929.
"After careful consideration and an in-depth review, AIG will stop offering insurance products in the general market in Uganda," AIG said at the time.
In 2013, AIG's business in Uganda was grouped with AIG's business in Kenya under a broader East African business region.