Equity Bank expands its regional footprint with the acquisition of banks in 4 African countries

James Mwangi, CEO Equity Bank

Equity Group has announced that it has entered not an agreement with Atlas Mara in a bid to acquire its banking operations in four African countries. The 4 countries are, Rwanda, Zambia, Tanzania and Mozambique. Atlas Mara is a sub-Saharan Africa financial services group.

As part of the transaction, Equity will acquire shares in Atlas Mara’s 62% shareholding in Banque Populaire du Rwanda Limited, 100% of African Banking Corporation (ABC ) in Zambia, Tanzania and Mozambique.

The transaction will take place via a share swap whereby, Atlas Mara will receive, 252 Million ordinary shares in the Equity Group. This represents about 6.27% of Equity’s issued shares which are worth about Ksh. 10.5 Billion.

The deal is however subject to regulatory approvals and the individual transactions are expected to be closed anywhere between the fourth quarter of 2019 and the first quarter of 2020, depending on the jurisdiction.

Commenting on the Proposed Transaction, Michael Wilkerson, Executive Chairman of Atlas Mara had this to say, “We are very pleased to announce this agreement with Equity Group. The Proposed Transaction is consistent with our previously announced strategic review, and our stated intention to focus on investments in core markets where a path to market leadership is clearly achievable, and to partner elsewhere. These four countries contribute less than 2% of total Group net income, with an implied aggregate return on equity of approximately 2%, and represent substantial carrying costs in terms of capital and liquidity support. The Proposed Transaction represents an opportunity to strengthen the position of these banks, and to refocus on our largest and strongest market positions.”

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