Kenya-based Equity Group has signed a binding term sheet agreement to acquire Atlas Mara’s stake in banks in Rwanda, Zambia, Mozambique and Tanzania.
Under the proposed transaction, Equity Group plans to acquire London-listed Atlas Mara’s 62% stake in Banque Populaire du Rwanda (BPR).
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It will also acquire all of Atlas Mara’s indirect interests in African Banking Corporation Zambia, African Banking Corporation Tanzania and African Banking Corporation Mozambique through ABC Holdings, a subsidiary of Atlas Mara.
Equity Group deal: details
As a part of the deal, Equity Group is expected to issue 252,482,300 ordinary shares to Atlas Mara as consideration. It represents around 6.27% of the pro forma share capital of EGH post-closing.
Overall, the transaction is estimated to value around $105.4m.
Atlas Mara executive chairman Michael Wilkerson said: “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.
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By GlobalData“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 deal is expected to close between the fourth quarter of 2019 and the first quarter of 2020. It is subject to regulatory approvals in the respective countries and other closing conditions.
The Equity Group deal is the latest among the series of consolidations announced among lenders in Kenya.
Earlier this month, KCB Group made an offer to acquire 100% shares of National Bank of Kenya (NBK).
