Equity Group targets BancABC units in four countries
BancABC branch in Dar es Salaam. PHOTO | FILE
What you need to know:
- The lender, publicly traded on the Nairobi Securities Exchange, had in March 2015 outlined an ambitious expansion strategy targeting countries outside six-nation East African Community in a plan whose cost was then estimated at Sh4.4 trillion (Ksh200 billion).
Dar es Salaam. Kenyan based Equity Group Holding has announced that it has entered into preliminary swap agreement with Atlas Mara Limited (ATMA) to acquire its banking units in four African countries.
The targeted units are BancABC subsidiaries located in four African countries: Tanzania, Mozambique, Zambia and Rwanda.
The BancABC Tanzanian subsidiary is owned by Tanzania Development Finance Company Limited (TDFL) which is also 68 per cent owned by African Banking Corporation Holding (ABCH) and the remaining shares are owned by the government of Tanzania.
The Sh220 billion (Ksh10 billion) deal puts back on track Equity’s ambitious pan-Africa expansion strategy, which it had put on hold in 2016.
Group chief executive James Mwangi was quoted by Kenyan Business Daily on Tuesday saying the advanced talks will see Equity buy out ATMA-owned African Banking Corporation’s (ABC) operations in Tanzania, Zambia, Mozambique as well as a majority stake in Banque Populaire du Rwanda (BPR).
Mr Mwangi said ATMA will, on successful completion of the agreement, be allotted a 6.27 per cent stake, or 252,482,300 shares in Equity in a share swap whose value has been put at Ksh10.7 billion.
The binding deal is subject to ironing out final details with ATMA as well as obtaining various approvals, including those from regulators and shareholders, reported Business Daily.
Successful execution of the deal will see Equity enter Zambia and Mozambique by acquiring ATMA’s 100 percent shareholding in ABCZam and ABCMoz, respectively.
Kenya’s largest lender by deposit accounts will also expand its wings in Tanzania by buying out ABCTz, while in Rwanda; it will take over a 62 per cent stake in BPR currently controlled by ATMA with plans to buy out the rest of shareholders in future.
