New medical aid giant raises eyebrows - 7 May 2008

Slindile Khanyile: Business Report,
Regis Nyamakanga: Business Day,

LETHIMVULA Investments and Old Mutual South Africa (Omsa) are considering combining their healthcare businesses, a move analysts say is an effort to rescue sinking ships, which poses no threat to rival Discovery. Lethimvula and Omsa announced yesterday that they had signed a memorandum of understanding that aimed to combine the respective administration and managed care businesses of Old Mutual Healthcare, Medscheme and Rowan Angel. Medscheme and Rowan Angel are owned by Lethimvula. Old Mutual Healthcare administers nine schemes, which include Oxygen, Medgroup, Clicks and BHP Billiton. Medscheme has 16 companies including Bonitas, Liberty, Eyethumed, Sasolmed and SABC, while Rowan Angel looks after Spectramed. If the transaction goes through, the new company will service about 2.3 million people. Discovery has just over 2 million members.

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