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It is five months since we last heard from life offices Metropolitan and Momentum on their merger talks. There are still some more hurdles to jump: the shareholders of both companies will vote on September and the investigations by the competition tribunal and the Financial Services Board are still taking place.
But some important issues have been resolved. The holding company will have the rather unimaginative name of MMI Holdings. The CEO has also been announced. Nicolaas Kruger, the CEO of Momentum will be the new boss of MMI, while Metropolitan CEO Wilhelm van Zyl is the deputy head. It is an indication that Momentum considers itself the senior partner.
But Van Zyl has been a graceful loser, and he will take responsibility for the integration of the asset management, employee benefits and health businesses.
And at least the finance director, Preston Speckmann is from Metropolitan.
There will inevitably be some retrenchments at asset management, which includes many of the best paid people in the groups. There will be only one manager, the core of which will be the RMB Asset Management team in Sandton.
Competent fund managers at Metropolitan Asset Managers such as chief investment officer Romeo Makhubela will have a good chance of staying but the organisation will not have room for two heads of equity or two bank analysts.
Competent fund managers at Metropolitan Asset Managers such as chief investment officer Romeo Makhubela will have a good chance of staying but the organisation will not have room for two heads of equity or two bank analysts.
There will be little room for job reduction in the core retail life assurance business, as Metropolitan focuses on households with incomes of R15000/ month or less and Momentum well above that. The separate brands will be used when selling life products to the public. MMI, after all, sounds more like a discount motor spares retailer.
Kruger says he expects the new MMI shares to be listed by mid-November.
A concern from analysts is the extent of FirstRand influence on the board.
FirstRand chairman Laurie Dippenaar will chair MMI. FirstRand CEO Sizwe Nxasana and COO Johan Burger will sit on the board. MMI and FirstRand do not compete now, but as financial services evolve they will certainly bump heads. Kruger says the intention was to keep it simple and merge the two boards. “The shape of the board could be quite different in a year or two.”
FirstRand chairman Laurie Dippenaar will chair MMI. FirstRand CEO Sizwe Nxasana and COO Johan Burger will sit on the board. MMI and FirstRand do not compete now, but as financial services evolve they will certainly bump heads. Kruger says the intention was to keep it simple and merge the two boards. “The shape of the board could be quite different in a year or two.”
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