The planned merger of Equity Bank Rwanda and Atlas Mara BPR that has been in works since April 2019 has been put on hold.
The announcement putting on hold the seemingly complex cross border banking transaction was announced by the CEO, Dr. James Mwangi.
The frozen transaction estimated at US$109 million was meant to significantly affect operations in four African countries namely Rwanda, Zambia, Mozambique and Tanzania.
The halting of the deal that was eagerly being waited with bated breath by main actors in Rwanda’s commercial banking sector was meant to intensify competition in the sector in a number of ways.
For starters, the deal was structured to enable Equity Bank Rwanda to emerge as a very stronger contender and challenger to market leader Bank of Kigali (BK) among other forms of realignments.
The deal was also meant by sheer implication of its financial magnitude to shake to the core, Rwanda’s commercial banking sector, in line with new policies being championed by sector regulator the National Bank of Rwanda, BNR.
“Equity Group Holdings hereby confirms that, as of date of this announcement, the parties have yet to sign detailed transaction agreements and the binding term sheet has expired”, Dr. James Mwangi is quoted in the statement. Dr. Mwangi added in his statement that, “Equity and Atlas Mara expect to continue further discussion in early 2020 to try to reach mutually acceptable commercial terms with respect to the proposed transaction or a variant of it.”
In the envisaged transaction, Equity Group was to acquire a majority 62% stake in Atlas Mara BPR and thereafter merge its Rwandan acquisition with Equity Bank Rwanda subject to regulatory approvals from BNR.
In addition, Equity Group was meant to acquire 100% stakes in Atlas Mara portfolios in rest of the other three countries.
In return, Atlas Mara Group was to acquire shares in Equity Group worth US$109 million equivalent to 6.27% of Equity Group shares that are listed at the Nairobi Securities Exchange (NSE).
The announcement of the stalemate comes at the back of significant realignments happening within Rwanda’s commercial banking sector.Equity Bank Rwanda created in 2011 with assets estimated at US$133 million was or for that matter is on course to merge with Atlas Mara BPR created in 1975 with assets worth US$320 million.However, a major rider in this particular merger deal is that BPR is Rwanda’s largest bank in terms of its 200 bank network with over 100 ATMs and employing over […]