Equity already has a subsidiary in DR Congo, which it acquired in May 2015. FILE PHOTO | NMG Equity Bank Group #ticker:EQTY will pay Sh10.7 billion to a wealthy family to acquire a 66.5 percent stake in a top bank in the Democratic Republic of Congo.
The bank Monday announced that it was in talks with the George Arthur Forrest family to acquire majority stake in Banque Commerciale du Congo (BCDC).
The Nairobi Securities Exchange-listed bank said it will pay $105 million (Sh10.7 billion) in cash for the 625,354 shares in BCDC in a deal inclusive of dividends that the bank will declare after January 1.
Equity already has a subsidiary in DR Congo, which it acquired in May 2015, and will seek to integrate the two banks in a merger that will create the second largest bank in the Central African nation.
The bank said it would acquire an additional 7.6 percent stake from KfW – a German State-owned development bank, pushing its ownership to 93.6 percent.
“By acquiring BCDC and the KfW stake in EBC, Equity will expand its footprint in DRC,” the bank said in a statement on Monday. “This is an opportunity for the group to take further steps towards the delivery of its vision of building sub-Saharan Africa’s premier financial institution.”
The bank has stepped up its expansion in Africa through acquisitions.
In April, Equity bolstered its African presence by announcing the purchase of shares in banks in Rwanda, Zambia, Mozambique and Tanzania, buying the assets of London-listed financial services firm Atlas Mara, underlying its deal-making appetite. Besides DR Congo, Equity Bank operates in Uganda, South Sudan, Tanzania and Rwanda, and mainly targets the lower-income segment of the market.
DR Congo is one of the biggest countries on the continent by land mass and has more than 80 million people, making it appealing to ambitious lenders looking for growth in the continent. The market is mainly focused on serving big companies with operations there, making it necessary to have a big balance sheet to be able to compete and grow, said analyst and Business Daily columnist George Bodo.
The merger of the bank and Equity’s DR Congo subsidiary will create a lender with assets of more than Sh100 billion. Rawbank is the leading commercial bank in DR Congo.
Equity entered DR Congo in 2015 through acquisition of ProCredit Bank and the business has overtaken the Uganda unit to become the most profitable subsidiary for […]