MMI Holdings Ltd., South Africa’s third-largest insurer, agreed to pay 1.6 billion rand ($158 million) for Alexander Forbes Ltd.’s insurance business.

MMI will fund the cash acquisition of Guardrisk from its “capital buffer,” the Johannesburg-based company said in a joint statement with Alexander Forbes today.

“The acquisition of Guardrisk is an important milestone to support our strategic intent to diversify our business to enable further growth,” Nicolaas Kruger, chief executive officer of MMI, said in the statement.

MMI was formed through the merger of Metropolitan Group Ltd. and Momentum Group Ltd. in 2010 and operates in 12 countries outside South Africa. The company will probably exceed its goal of 500 million rand in post-merger savings by the middle of 2014, the CEO said in September, adding that MMI plans to “fast track” growth in countries where it already has a presence.

Alexander Forbes, Africa’s largest independent retirement- fund administrator, said in September it plans to list on the Johannesburg Stock Exchange after June next year.

–Editors: Dylan Griffiths, Dale Crofts