I&M Holdings #ticker:I&M has completed the acquisition of a 90 percent stake in Uganda’s Orient Bank Limited in a deal worth Sh3.6 billion.
The Nairobi Securities Exchange-listed firm said in a statement that the transaction was completed on April 30 after receipt of the necessary approvals from the Central Bank of Kenya, Bank of Uganda, Capital Markets Authority of Kenya and the Comesa Competition Authority.
The lender says the transaction has given it access to additional loans worth Sh7.7 billion, deposits (Sh18.2 billion), 70,000 customers, 14 branches and 22 ATMs.
“This acquisition is expected to give the group greater capacity to grow profitably, through extending our network to our regional customers,” I&M’s executive director Sarit Raja Shah said in a statement.
The Kenyan banking multinational bought shares from Orient Bank’s shareholders Hemlata Karia, Jay Karia, Morka Holdings Limited, Zhong Shuang Quan, Cornerstone M8 Limited and the bank’s founder Ketan Morjaria.
Dr Morjaria, who held a 7.91 per cent stake before the transaction, sold part of his shares and retains a 5.5 per cent equity in the subsidiary.
Mr Alemayehu Fisseha did not sell his holdings and also retains a 4.5 per cent interest in the bank.
“This acquisition marks a great milestone in the history of Orient Bank,” Dr Morjaria said in a statement.
“We are proud to be integrating into a regional group like I&M Holdings Plc and this synergy will allow our customers to benefit from more seamless and superior banking products whilst continuing our tradition of trust.”
I&M had said that the Sh3.6 billion purchase price would be subject to further adjustments on account of several factors including exchange rate fluctuations and the amounts raised from the sale of the Ugandan bank’s property in Kampala (Orient Plaza).
The deal will add to I&M’s regional banking operations comprising Kenya, Rwanda, Tanzania and Mauritius.The lender had been eyeing the Ugandan market as early as 2014 in pursuit of growth and regional diversification strategy that is also seen among rivals like KCB Group, Equity Group and DTB Group.“The combined group will be better able to serve the needs of regional and global customers, and in turn promote regional trade flows,” I&M said of the Orient Bank buyout in a circular to shareholders.
