Territory Dispute Clouds $1.1 Billion S. Africa-Morocco Deal

(Bloomberg) -- The South African government’s support for a political movement some 4,500 miles away could complicate a $1.1 billion deal.

Moroccan billionaire Othman Benjelloun on Tuesday spoke out against South Africa-based Sanlam Ltd.’s acquisition of insurer Saham Finances SA, saying South Africa has chosen the wrong side in a territorial dispute. South Africa supports a group called the Polisario Front, which has been seeking self determination in the Western Sahara territory since 1991. Morocco also claims ownership of that sparsely populated desert region.

“We end up with a South African investor, owning a company that was Moroccan, on our own territory,” the financial services tycoon told reporters in Casablanca on Tuesday. “We aren’t going to hide that we have not appreciated this gesture.”

Benjelloun is the chairman of Morocco’s BMCE Bank and an influential voice in the North African country’s financial services industry.

"We will applaud the fact that Saham stays South African" when Pretoria changes tack regarding Western Sahara, he said. “Until they do, they are not getting our support.”

Sanlam agreed to take full control of Saham in a $1.1 billion deal last year, making it the South African company’s biggest acquisition. The insurer is seeking more acquisitions to cement its position as the continent’s largest financial-services firm outside of banking.

To contact the reporter on this story: Souhail Karam in Rabat at skaram10@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, John Bowker, Benjamin Harvey

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