South African billionaire Patrice Motsepe acquires stake in financial services firm

African Rainbow Capital, chaired by billionaire Patrice Motsepe, agreed to buy 10 percent in the main operating unit of Johannesburg-based Alexander Forbes Group for R753.5 million (US$56 million).

African Rainbow Capital, known as ARC, will pay R14.69 (US$1.08) a share for the stake in Alexander Forbes, which houses the company’s African and international operations, Alexander Forbes said in a statement on Thursday.

Motsepe, the richest black South African, started African Rainbow Capital in April as part of a plan to build a financial services company controlled by black people and spanning everything from life insurance, health-care, money management and banking.

Companies in South Africa have sold stakes to black investors to compensate for discrimination under the brutal and racist apartheid system, which ended in 1994, with the economy still controlled by the white minority.

The transaction, which is subject to South African federal regulations and conditions including shareholder approval, is expected to be completed by the end of the year.

Source: Bloomberg