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Big is beautiful: Minet eyes big business after AON buyout

Minet Africa Chief Executive Officer Joe Onsando talks about the acquisition of AON by Minet through equity investment of CapitalWorks of South Africa. He explains the deal’s structure and how it will be a game-changer in the industry as the company repositions for a fresh assault on the African market.

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Joe Onsando, Minet Africa CEO: We have become a much more agile organisation in terms of our ability to seek out local opportunities and quickly exploit global opportunities.

BUSINESS TODAY: What is the strategic thinking behind the acquisition of AON by CapitalWorks and consolidation of operations with Minet Africa?

ONSANDO: Two years ago AON looked at its global operations and decided to categorise them differently. Some operations would be better off as correspondents rather than as directly owned entities. This had a lot to do with the changes that were taking place in the market, especially in America, where the regulatory environment was getting stringent and requiring a lot of reporting to regulators on different aspects.

BT: How has the acquisition been structured to ensure both synergy and expansion?

ONSANDO: In this restructuring a lot of operations of AON around the world were converted from directly owned entities to correspondents, many of them in South America, Eastern Europe and other places. In Africa AON had operations in 12 countries. The first lot is now converting into correspondents and expect this process to conclude by close Q1 of 2018.

BT: Talking of correspondents, how will this work. In other words, what really does this mean in terms of repositioning the business?

ONSANDO: As correspondents we still retain the relationship we had with AON. We will still manage AON’s clients across the continent. We still have access to AON’s intellectual capital, research materials as well as benchmarking reports and experts across the globe to service our clients. What changes is pure share ownership in the companies.

BT: What other changes have been implemented to bring about a new and stronger entity?

ONSANDO: We have had to rebrand. In searching for a new identity, we went through a rigorous process which brought us back full circle because we decided to go with Minet, a brand that is already well known in Africa and highly respected across the continent.

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BT: From a client’s perspective, what value should they expect from this deal?

ONSANDO: We have become a much more agile organisation in terms of our ability to seek out local opportunities and quickly exploit global opportunities. We have expanded our ability to invest in technologies that will serve our markets best without having to wait in line – which happens most of the time when you are a small part of a large multinational. It also gives us the opportunity with our new partners, CapitalWorks, to expand the network. Currently we are in 10 countries, and will become 12 in the first quarter of next year.

BT: Which brings in the question: What is Minet’s expansion plan after this transaction?

ONSANDO: Our intention is to expand this network particularly to Western Africa markets. Hopefully, in the near future we will be talking about a whole AON Minet network in Africa spanning 30 countries. This will enable us tap into what we believe is really the growth engine of this continent’s economy, which is intra-Africa trade as African companies start investing in other African markets, servicing other African markets, and manufacturing for other African markets. This will be really a boost to growth for other African companies.

BT: Sir, won’t that be biting more than you can chew?

ONSANDO: We are well positioned knowing the continent as we do for such a long time to play a risk advisory role for such companies. We have seen this already. There are lots of Kenyan companies operating in South Sudan, Uganda, Tanzania, and even Rwanda and there are many companies from Botswana coming into East Africa. The other big opportunity in our continuing relationship with AON is providing capacity through our re-insurance arm into reinsurance markets in Asia and Europe through the AON network for companies in Africa, both for new investments and growing companies.

BT: Meaning, you are acting local but thinking global?

ONSANDO: We get the best of both worlds – local but at the same time part of a global organization.

BT: Such transactions obviously come with restructuring that may include reduction of employees and/or closing down of certain units. What’s going to happen at Minet?

ONSANDO: We have run a very success organization in all the markets we are operating. We have great teams and they are doing a great job. We don’t intend to downsize or right size. We believe we are optimum in terms of staff utilization. The situation you are describing is if two organisations were merging, obviously there might be need to shed some jobs because there will be duplication of roles.

In this case our investor, CapitalWorks, is a private equity firm from South Africa and expect a return. As management we shall run the company and provide that return. They are not bringing in any staff. They invested in this because it’s a successful organization and we shall continue that way. So no job losses as a result of this transaction.

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Managing Editor, BUSINESS TODAY. Luke is a veteran business journalist with over 10 years experience in reporting and editing, having worked for People Daily and Standard Newspaper as reporter and the Nation Media Group as business editor. Email: [email protected] ke

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