Process and challenges in the merger between Apollo and Pan Africa General Insurance Companies
Abstract
A lot of mergers took place in the banking industry in the recent past whereby smaller
banks have been merging together after the Central Bank of Kenya made regulations
about the minimum capital requirements for each bank. No such regulations have been
made by the commissioner of insurance but his office has been encouraging mergers in
the insurance industry. The merger between Pan Africa General and Apollo Insurance
Company was the first one in the recent past in the insurance industry. So it was
considered important to study this merger so that other players in the industry could
benefit from its experience. The main objectives of this study were:-
l . To establish the factors that influenced Pan Africa General and Apollo Insurance
Company to merge together.
') To identify the key merger processes undergone during this merger.
3. To identify the challenges encountered after the merger.
The data was collected by in-depth interviews of 11 executives of the newly formed
company- APA Insurance Company by usmg an interview guide. The results clearlv
showed that lack of internal capacity to manage general business. lack of technology &
marketing skills on the part of Pan Africa General were the main factors which
influenced this company to look for a strategic partner to merge with. Aspiration of the
owners of Apollo Insurance Company to grow and expand into new markets and products
was also the main contributory factor for this firm to merge with Pan Africa General. The
processes undergone were' followed professionally. Apollo Insurance Company emerged
as the dominant party. The integration process was also led very professionally by the
CIO who was also the CEO of the new company.
Two main challenges faced by APA Insurance Company which came out very clearly
were the cultural differences and the differences in the working practices and conditions
of the. employees of the two merging partners. However, the efforts to resolve the
differences have born fruit and after one year of merger, people seem to be comfortable
. working in the new environment. It is recommended that a prospective study about the
financial performance of this merged company be conducted for the next few years to see
if this merger was helpful in creating wealth for the shareholders of the two merging
partners
Citation
MBASponsorhip
University of NairobiPublisher
University of Nairobi School of Business, College of Humanities and Social Sciences