Kenya’s second-biggest bank by assets has announced that they have entered into a discussion with Atlas Mara Limited on the acquisition of bank stakes in Zambia, Rwanda, Mozambique and Tanzania.
This is the third major deal announcement by the Equity Bank among other leading lenders since 2016 when the government crapped the commercial lending rates. Since then, local financial institutions were forced to seek alternative means of survival, consolidation being one of them.
In its announcement, Equity Group said that the negotiations would see the bank sign agreements to acquire Rwanda’s Banque Populaire du Rwanda through a 62 per cent share swap, and 100 percent of African Banking Corporation of Zambia, African Banking Corporation Tanzania and African Banking Corporation Mozambique.
The bank has further stated that they intend to issue 252,482,300 new shares, which represents 6.27 per cent of its expanded share capital.
“This implies that the monetary value of the consideration to be paid is the equivalent of 10.7 billion shillings (equivalent to approximately $105.4 million),” Equity said.
In the event that the deal will be through successfully after undergoing regulatory approvals in various countries, then Atlas Mara would automatically be a shareholder of Equity.
Previously, a similar move was taken by Kenyans biggest lender by assets, Kenya Commercial Bank (KCB) offered to buy National Bank through a share swap.
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