Category Archives: Equity Bank

M&A Moment: September 2020

Since the last update of deals in the East Africa region, we are six months into the era of Coronavirus and its effects across the world.

Merger and acquisition (M&A) deal are still happening, with some older ones having been in the pipeline for months before. The impact of the pandemic has also created some new M&A deals and partnerships, while reducing the value of others, and even killing off some earlier-announced merger deals, in scenarios that had all been foreseen by deal-makers.

https://twitter.com/gina_din/status/1227504077203886081

Here are some notable deals (1 US dollar equals 108 Kenya shillings)

Airline/ Oil/Energy/Mining M&A

  • Jubilee Holdings is acquiring an additional 9.4% share in Uganda’s Bujagali Hydropower from SN Power for $40 million to now own 18.2% of the project as part of a diversified portfolio that includes quoted stocks, bonds, real estate and interests in Farmer’s Choice, PDM and Seacom. 
  • The proposal to nationalize Kenya Airways through a National Aviation Management Bill, which grew out of a proposal by the airline to manage Nairobi’s main airport, will be debated in Kenya’s Parliament over the next few months.
  • Shareholders of Tullow Oil approved the sale of its entire interest in Blocks 1, 1A, 2 and 3A in Uganda and the proposed East African crude oil pipeline System to Total. 
  • The proposed Transfer of 85% of Global Petroleum Products Kenya  to E3 Energy DMCC has been approved 
  • Barrick Gold and the Government of Tanzania have signed an agreement to launch a new joint venture to oversee the company’s future gold mining operations in the country. 
  • The Competition Authority approved the proposed acquisition of 100% of Acacia Exploration (Kenya) by Shanta Gold Mauritius.
  • Safaricom bought 18.96% of Circle Gas for Kshs 385 million. The gas company has interests in Tanzania also acquired KopaGas’s technology in a $25 million transaction, one of the largest private equity investment in the clean cooking sector
  • In what will be a controversial deal, Kenya plans to have the Industrial and Commercial Development Corporation become a super agency to oversee a new Kenya Transport and Logistics Network (KTLN) that will coordinate the Kenya Ports Authority, Kenya Railways and Kenya Pipeline Company.
  •  Deal Undone: The Competition Authority has noted that the acquisition of 80% of the Embraer by Boeing has failed to take place following the decision of the parties to withdraw from the transaction. 

Banking and Finance: Finance, Law, & Insurance M&A

Kenyan Banks  

  • Kenya’s Central Bank approved the acquisition of 51% of Mayfair Bank by Commercial International Bank, Egypt’s leading private sector bank, and it will be renamed as Mayfair CIB Bank.  
  • The Central Bank of Kenya approved the takeover of 90% of Jamii Bora Bank by the Cooperative Bank of Kenya.
  • Access Bank completed the acquisition of 100% of Transnational Bank. 
  • Centum’s Bakki Holdico has acquired all the shares of the late Ambassador Bethuel Kiplagat in Sidian Bank (via Business Daily) 
  • Equity Bank has completed its buyout of 66.53% BCDC in DRC. Covid saw the final price reduced by $10 million to $95 million.  
  • Deal undone: Atlas Mara and Equity Bank mutually agreed to discontinue transaction discussions given the effects of the COVID-19 pandemic.
  • Deal undone? Businessman Naushad Merali and Mwalimu National Sacco plan to sell their stakes in Spire Bank after it issued a notice to engage potential suitors to buy a 100% of the bank. 

Investment Markets and Deal Makers

  • The Nairobi Securities Exchange acquired 61% of AKS Nominees, which holds an 18% share in the Central Depository and Settlement Corporation (CDSC) for Kshs 77 million.
  • Genghis Capital has partnered with EGM Securities to offer investors a wider range of alternative asset classes including online currencies, commodities, precious metals, oil, and biotech stocks.
  • Helios & Fairfax to partner on Africa investments
  • Fanisi Capital and Ascent Capital are set to merge and raise funds for bigger deals in the region.
  • Two Nairobi stockbrokers AIB Capital and Apex Africa entered a joint venture that will lead to a merger. The entity will be part of Mauritius firm, the AXYS Group which acquired Apex in 2015.
  • African Alliance Kenya investment bank is divesting from stockbroking owing to a structural decline in the agency trading model in both the local and global financial markets (amplified by the Covid-19 pandemic)

Insurance

  • The Competition Authority approved the acquisition of 24.1% of ICEA Lion Insurance Holdings by Eastern Africa Holdings which is being used by private equity firm Leapfrog Investments for the buyout of  ICEA Lion Insurance Holdings for Kshs 10 billion.
  • The sale of Stanlib Kenya to ICEA Lion was approved by the Competition Authority though clients have pulled out Kshs 75 billion following the deal. 
  • Mauritian insurance company MUA completed the acquisition of Saham Assurance Company Kenya. 
  • Octagon Africa, who offer pension, actuarial and insurance services in Kenya, Uganda and Zambia acquired a 49% stake in the Zambia subsidiary of Alexander Forbes who doing a group strategic review. 

Regional Banks

  • The Tanzania Postal Bank (TPB) has absorbed a third bank, TIB Corporate, in a new merger deal. 
  • The National Bank of Malawi plans to invest in Akiba Commercial Bank in Tanzania in a bid to expand its operations beyond Malawi.
  • The Bank of Tanzania approved the merger of Mwanga Community Bank and Hakika Microfinance Bank to form the Mwanga Hakika Microfinance Bank. 
  • EFG Hermes and the Sovereign Fund of Egypt aim to acquire 76% of the Arab Investment Bank. EFG Hermes will own 51% of the bank and plans to transition from an investment bank to a commercial bank. 
  • I&M Bank is buying Orient Bank in Uganda.  

Remittances

  • WorldRemit has agreed to acquire Sendwave, an app-based remittance company in a cash and stock transaction. 
  • Beyonic has been acquired by MFS Africa.  

Agri-Business, Food & Beverage M&A

  • Kenya has floated an international expression of interest for the privatization of five sugar firms
  • The Kenya Tea Development Agency Limited (KTDA) and the Japan International Cooperation Agency (JICA) are each investing over Kshs 150 million to set up Africa’s first Japanese speciality green tea production factory at Kangaita Tea Farm in Kirinyaga County. 
  • President Kenyatta has ordered the Kenya Meat Commission to be transferred from the Ministry of Livestock to the Ministry of Defence
  • Dominion Farms on a parcel of land comprising 3,700 hectares at Yala Swamp in Siaya County is being transferred to Lake Agro Ltd.

Health and Medical, Pharmaceutical M&A

  • Indo-Oceania Ventures is acquiring Mayfair Healthcare Holdings
  • The CDC Group and Novastar Ventures have invested in mPharma which currently operates in Ghana, Nigeria, Kenya, Zambia and Zimbabwe, and serves approximately one million patients annually, through a network of over 400 pharmacies.

Logistics, Engineering, & Manufacturing M&A

  • Mum’s Village Kenya has merged with BabyBliss Nigeria to create the Bliss Group Africa. 
  • Portuguese multinational Salvador Caetano Group has invested Kshs 350 million to launch an automotive hub in Kenya and be the dealer for Renaultand Hyundai cars with plans to venture into the local assembly of the two brands.
  • Bolt, the ride-hailing app, has received a EUR 50 million as venture debt facility from the European Investment Bank to support its research and development strategies.
  • Kenyan e-commerce startup AfricaSokoni has acquired Nigeria company Bolorims to expand into the West African country. The deal, which gives Bolorims a 10% cent stake in AfricaSokoni, creates a new entity in Nigeria, Bolosokoni.com, with AfricaSokoni continue to trade as before in Kenya. 

Real Estate, Tourism, & Supermarkets M&A

  • LSE-listed Network International Holdings is to acquire Nairobi-headquartered DPO Group for $288 million worth of shares of Network. The firm whose payment services are used in 19 African countries, was affected by COVID disruptions of travel and the tourism sector. DPO’s founders will get $13m worth of shares and Apis Growth Fund receives $50m of shares in Network. 
  • PrideInn Group has acquired Azure Hotel and re-opened the Kshs 1.2 billion Westlands hotel that suspended operations in March during the pandemic.  
  • Cloud9xp, an online booking service for leisure experiences and an alumnus of Nairobi Garage, has been acquired by Kenyan-based travel-tech outfit HotelOnline in a share swap deal. 
  • Tusker Mattresses announced plans to recapitalize through the sale of a majority stake that is supported by seven shareholders in its Orakam parent company. But it’s not clear if this will be enough to save the struggling retailers that initially tried to secure short-term supplier support through ring-fencing of payments.  
  • Slumberland Kenya is being transferred to Simba Foam.
  • Deal undone: Tiffany & Co. has filed a lawsuit to compel LVMH Moët Hennessy-Louis Vuitton to complete a merger transaction on earlier-agreed terms, noting that COVID-19 has not prevented other parties from concluding similar deals 

Telecommunications, Media & Publishing M&A

  • Edelman, the largest independent global communications firm, has expanded its African footprint with the acquisition of Gina Din Corporate Communications
  • Scangroup completed a long-standing deal after a special EGM in May 2020 saw 88% of its registered shareholders participate and vote 99.98% in its favour.
  • Safaricom and Vodacom have acquired control of M-Pesa in Africa from Vodafone for Kshs 2.15 billion, with each firm paying 50% of the amount (Kshs 1.07.billion) as their share of the joint venture. 
  • Tigo has combined with Zantel. The Tanzanian firms have a combined 12.8 million customers and 7.4 million mobile money users.
  • Mettā and Nairobi Garage are combining their services to create Kenya’s largest innovation community, offering access to all their networks, while members will have access to both organizations’ workspaces throughout Nairobi and the complimentary business support services
  • Nigeria’s CcHub acquired Kenya’s iHub to create a mega Africa incubator.
  • Deal undone: Telkom Kenya and Airtel have mutually agreed to end their pursuit of a joint venture. This came after conditions were raised that delayed the deal.  

Other M&A

  • Sport: The legendary Williams F1 racing was taken over by US investment firm Dorilton Capital. Covid and a sponsor departure were triggers for the deal. 
  • Foreign Aid: The United Kingdom, which is leaving the European Union, plans to merge the Department for International Development and the Foreign and Commonwealth Office – to become the Foreign, Commonwealth and Development Office.
  • Art: The art prize collection of the bankrupt Abraaj Group was acquired by a Saudi art organization Art Jameel and will be hosted at their space in Dubai. 

M&A Moment: November 2019

A roundup of East Africa merger deals announced, ongoing, or completed in the latter half of the year 2019. Most are drawn from approval decisions from the Competition Authority of Kenya (CAK Kenya).

The deals include:

Airline/ Oil/Energy/Mining M&A

  • The CAK authorized the proposed acquisition of 863,477 Series B preferred shares in Windgen Power USA Inc. by Omidyar Network Fund LLC, Acumen Fund Inc., Stitching DOB Equity and Microgrid Catalytic Capital Partners. WindGen has operations in Kenya through its wholly owned subsidiary PowerGen Renewable Energy East Africa and the power it generates will be sold to Kenya Power.
  • Rubis, having completed the takeover of Kenol, are now going after Gulf Energy, the fourth-largest fuel marketer in Kenya with 46 stations.
  • A bid by the owners of IberAfrica, Kenya’s largest thermal power producer, to sell the company to a South African energy firm has collapsed. Read more.

Banking, Finance, Law, & Insurance M&A

  • The CAK approved the proposed merger between Commercial Bank of Africa and NIC Group on condition that they retain 1,872 employees for a period of 12 months. Post-merger, the market share of the entity will be 10.67%, making it the country’s second-largest bank.
  • Equity Group entered a non-binding agreement with certain shareholders of Banqué Commerciale du Congo (BCDC), for the purchase for cash of a controlling equity stake in BCDC, with a view to eventually amalgamating the business of BCDC with that of EGH’s existing banking subsidiary in DRC, Equity Bank Congo.
  • The CAK approved the proposed acquisition of National Bank of Kenya by KCB Group on condition that 90% of the merged entity’s employees will be retained for a period of eighteen months.
  • Fund manager ICEA Lion Asset Management has signed an agreement to acquire Stanlib Kenya’s business of managing funds, assets and investment in Kenya – including the Fahari I-REIT – in a deal valued at Kshs 1.5 billion. 
  • The business of non-deposit taking micro-finance carried on by Kenya Ecumenical Church Loan Fund has been transferred to ECLOF Kenya. 
  • The CAK has authorized the proposed acquisition of 93.57% of  Transnational Bank Plc by Access Bank Plc. The market share (of Transnational) is significantly low, and the acquirer intends to enter the Kenyan market and continue with the business of the target.
  • Exim Bank Tanzania acquired UBL Bank, a subsidiary of Pakistan’s UBL Bank, as part of its plan to expand nationwide and become a top- five bank in the country. It now has assets of 1.7 trillion Tanzania shillings. 
  • In 2017 private equity firm Capitalworks acquired AON’s shareholding in several African operations, alongside local shareholders including governments in many markets.
  • I&M Holdings unit, GA insurance has acquired 100% of Nova Insurance Company in Uganda. It is part of GA’s plan to expand across East Africa where insurance penetration remains low. (via Kenyan Wall Street).

Agri-Business, Food & Beverage M&A

  • Coca-Cola Sabco (East Africa), which owned 72% of Nairobi Bottlers, has bought 27.6% of that company from Centum Investments, along with 53.9 % of Almasi Bottlers for a total of Kshs 19.2 billion. Centum states that the stakes had a combined value of Kshs 16.8 billion. CAK approved the deals on condition that it continues to operate current bottling plants in Nyeri, Eldoret, Nairobi, Molo and Kisumu for at least three years and retains 1,749 of the 1,760 permanent employees for the same period. Also that Almasi reserves 20% of the storage space in its coolers to SMEs for products (excluding products of Coca-Cola’s three largest global competitors). Coca Cola shall also allow Coastal Bottlers to distribute other non-alcoholic ready-to-drink brands.
  • The CAK approved Vivo Energy B.V.’s proposed investment in Kuku Foods which operates 24 outlets in Nairobi, Mombasa, Nakuru, Eldoret, Kisumu and Nanyuki under franchise from America’s Kentucky Fried Chicken (KFC).
  • The CAK approved the proposed subscription of 33.9% and joint control of Maziwa by Pledge Holdco, which is wholly-owned by Texas Pacific Group (TPG). Maziwa is owned by Bainne and distributes of milk and milk-related products in Kenya, Uganda and Zambia under the brand name ‘Lola’.  The CA determined that the main players in the processed milk market, were Brookside Dairy (40%), New Kenya Co-operative Creameries, (25%), Sameer Agriculture (14%) and Githunguri Dairy Co-operatives (12%) while the merged entity will have a market share of 3.9%.
  • The CAK approved the acquisition of 100% of Aquamist Ltd by Aquapani Ltd. Aquapani is newly incorporated in Kenya as a wholly-owned subsidiary of the Menengai for the sole purpose of this transaction. The deal is being done alongside Aquaplast which manufactures PET bottles, jars and closures and Polycarbonate plastics for refillable water containers mainly for the bottling business of Aquamist.
  • The CA-K approved an investment by Stitching DOB Equity and Acumen Fund into Coconut Holdings which had a turnover of Kshs 162 million in 2018. More here.
  • The CA-K approved the acquisition of 100% of Gilani Butchery by Upland Meat Products. Gilani had s turnover of Kshs 116.9 million in 2017.

Health and Medical, Pharmaceutical M&A

  • US pharmaceutical firm Johnson & Johnson has teamed up with private equity firms, South Africa’s Inqo Investments and London-based Sumerian Partners, to buy out Naivasha-based South Lake Medical Centre in a deal valued at nearly Kshs 100 million. The hospital was acquired from Flamingo Horticulture which had established the facility to serve its low-income farmworkers.  
  • Interswitch has acquired eClat, expanding its reach into Nigeria’s health-tech sector. The move is the latest in a series of strategic investments into Africa’s growing digital marketplace by the firm. Asoko has tracked 8 other deals in the Nigerian health care industry since 2015, of which the eClat deal is the second involving a health-tech firm. Investors were most active in the pharmaceutical segment, with three deals in that space over the period. (via Asoko
  • The CAK authorized the acquisition of 54.23% of AAR Health Care Holdings by Hospital Holdings Investments. In addition to constructing a hospital, the acquirer is targeting equity investments in clinics and hospital chains across East Africa. The target operates 21 primary outpatient healthcare clinics in Kenya.

Logistics, Engineering, & Manufacturing M&A

  • The  CAK authorized the proposed acquisition of all ARM Kenya‘s (Under Administration) businesses, assets and properties by National Cement Company on condition that the merged entity ensures continued operation at ARM’s Kaloleni and Athi River plants and retains 95% of ARMs 1,100 employees.
  • The CAK authorized the proposed acquisition of the plastic manufacturing business of Metro Plastics (Kenya) by Metro Concepts East Africa on condition that the acquirer absorbs at least ninety employees. Metro Concepts East Africa, a company incorporated in Kenya, is ultimately owned by Ascent Rift Valley Fund, a private equity Fund incorporated in Mauritius, with minority control in investments across East Africa.
  • CAK has authorized the proposed acquisition of control of Chemi & Cotex Kenya by Unilever Overseas Holdings B.V on condition that the acquirer continues providing the products (Whitedent, Bodyline, Baby Soft, Skin Glow, Siri, U & Me, Lovely, Barnister and Tressa) in the market for at least three years.
  • The CAK approved the proposed acquisition of an additional 47.5% shareholding in Speedex Logistics Ltd by Suresh Naran Varsani. The transaction will result in a change of ownership from joint to sole control.
  • The CA-K approved the acquisition of direct control by Tuffsteel in Hwan Sung Industries Kenya which has a turnover of Kshs 5.8 million in 2018.
  • The CA-K has approved the proposed acquisition of 100% of the publicly held shares in Panalpina Welttransport Holding (Panalpina World Transport Holding) A.G by DSV. In Kenya, Panalpina Airflo provides freight forwarding services of perishable goods, mainly fresh vegetables and cut flowers.. Post-transaction, CA-K data shows that the the merged entity will have a market share of 18% air freight services [current leaders are Kuhene + Nagek (28%) Panalpina Airflo (15%) Freight Forwarders Group (9%) Air Connection (8%) Siginon Freight (7.5%) Bollore (6%) Schenker (4%) and DSV (3%)], 6% of the sea freight sector [current leaders are Maersk Line (18%), Century Cargo (14%), Mediterranean Shipping Company (11%), Filiken Transit (9%) Damco (7.5%) Panalpina (4%) Kuhene + Nagel (3%) DSV (2%)] and 1.5% of overland services and logistics .

Real Estate, Tourism, & Supermarkets M&A

  • The CAK approved the proposed acquisition of 100% of Quick Mart by Sokoni Retail Kenya, which is owned by Adenia Partners of Mauritius, a private equity fund manager. Quick Mart, incorporated in 2006, has 10 supermarket outlets located in Kiambu, Nairobi and Nakuru counties. In October 2018, Sokoni had acquired Tumaini Self Service, another retailer in Kenya with 13 outlets located in Nairobi, Kiambu, Kajiado, and Kisumu counties. EDIT Quickmart has recently undergone a merger with Tumaini Self service stores and the merged entity will be the third largest retailer in Kenya, backed by a strong institutional investor, with plans to open 6 stores over the next year.
  • The CAK approved the proposed acquisition, with controlling rights, of 22.32%  of the Riara Group of Schools by Actus Education Holdings AB. Riara operates six learning institutions in Kenya which offer the 8.4.4 and British Curriculum education systems. The CA found that of the schools offering British Curriculum, Braeburn Schools with 10.2% of the students, Aga Khan Academy 7.1%, Srimad Premier Academy 3.8%, and Oshwal Academy 3.4%. The CAK has approved the acquisition of 100% of the shares in Abercrombie & Kent Group of Companies by Heritour Ltd. One of Abercrombie’s Kenya subsidiaries is a tour operator that offers tourist accommodation in the Maasai Mara.

Telecommunications, Media & Publishing M&A

  • The CAK authorized the proposed acquisition of 100% shareholding in Eaton Towers Holdings by ATC Heston B.V 
  • BRCK has acquired the Surf Network. BRCKs Moja Network passed 300,000 unique monthly users in January, with 1,500 mobile nodes in buses and matatus across Nairobi and Kigali. The new acquisition takes them close to 500,000 active monthly unique users,  and they state this is the largest public Wi-Fi network in East Africa, and second-largest on the continent. 
  • Co-creation Hub (CcHUB), the leading technology innovation centre in Nigeria, acquired Kenya’s iHub for an undisclosed fee. The deal will see the iHub become part of the CcHUB’s network, while retaining its name and senior management structure.  The move comes seven months after CcHUB expanded into Rwanda, with the launch of its Design Lab. 
  • The Airtel-Telkom merger is still ongoing. Kenya’s Parliament has raised some queries about the transfer of government assets and shares as has the Ethics and Anti-Corruption Commission. Rival Safaricom also stepped in and pressed for the two companies to settle a combined debt of Kshs 1.3 billion they are owed before the transfer is completed. They also argue that the merged entity will have an outsize frequency allocation (77.5 MHz of spectrum serving 17.3 million customers) compared to Safaricom (who serve 31.8 million customers with 57.5 MHz) and ask that this is rebalanced. EDIT December 14: The Competition Authority has approved the proposed acquisition of the mobile operations, enterprise and carrier services business of Telkom Kenya by Airtel Networks Kenya with conditions including; the merged entity shall not sell or transfer its licenses (Network facility provider, applications service provider, content service provider, submarine cable landing ) and frequency spectrum (800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz), with the 900 MHz and 1,800 MHz ones reverting to the Government after they expire. Also, the merged entity shall honour all agreements and not enter any sale agreements (for five years). It shall retain 114 Telkom Kenya employees for two years and 115 others of the merged entity and not enjoy preferential access to the 4,204 kilometers of fibre managed by Telkom on behalf of the Government.
  • The CAK authorized the proposed acquisition of 100% of  De La Rue Kenya by HID Corporation on condition that all existing contracts De La Rue has with the Kenyan Government are honoured.
  • The CAK has authorized the proposed establishment of a joint venture and the acquisition of control of certain assets of Kul Graphics, The Rodwell Press, Printfast Kenya, Digital Hub and Colourprint by The Print Exchange on condition that the parties retain 100 permanent employees of the merger parties for a period of one year after completion of the transaction and the 72 contractual employees serve to the end of their contracts.  In May 2019, the directors of the six companies had announced plans to merge due to the printing industry’s price sensitivity and demands for new technological innovations that had created financial and operational challenges for them.
  • The CAK has approved the acquisition of 80% of iWayAfrica Kenya by Echotel International Proprietary. iWayAfrica Kenya provides a range of ICT services. The CA estimated market shares for the main providers of retail Internet access services to be Telkom Kenya (28%), Liquid Telecom (25%), Safaricom (14%), Internet Solutions (13%) and Simbanet (4%). iWayKenya is at 1.2% and Echotel at 0.6%.
  • It was announced this week that two of Tanzania’s best-known telecommunications companies – Tigo and Zantel – have completed there merger, combining their operations on both mainland Tanzania and Zanzibar. (via Arden Kitomari)
  • The CA-K approved the acquisition of direct control of Digital Packaging Innovation Holdings and A-One Plastics by Rifts Investments.
  • ScanGroup is set to sell two of its subsidiaries for more than Sh2.4 billion in a deal that was triggered by a related transaction involving its London-based parent company WPP Plc with Bain Capital. Read more.

Other M&A

  • The business carried on by Pa’shante Enterprises in Nairobi has been sold and transferred to Pashante Greens Africa.
  • The assets and inventory of Mapflex East Africa at Airport North Road will be transferred to Actiflex Ltd. 
  • The business of a barber and spa carried on Crystal Barber and Spa on Kiambu Road has been sold and transferred to Esther Kinya Guantai. 
  • The CAK authorized the proposed acquisition of Honos Parent Ltd by Doctor No Parent Ltd. CR Honos has operations in Kenya through its subsidiary, Kenya Kazi Limited that provides manned guarding services — secure journeys/events, VIP protection, and cash in transit – as well as alarms fire suppression & detection.

Since the last update in January 2019

Equity buys BCDC, its second bank in DRC

Kenya’s Equity Bank Group Holdings has entered an agreement with some shareholders of Banqué Commerciale du Congo (BCDC) to buy a controlling stake in the bank with a view to consolidate it with its DRC subsidiary.

This comes a few years after Equity invested in DRC by purchasing a stake in ProCredit Bank. At the end of 2018, the DRC constitutes 8% of Equity group’s revenue, second behind Kenya’s 75% and ahead of Uganda, Tanzania and Rwanda. The DRC subsidiary had ~$558 million in assets, accounting for about half of its regional subsidies, with ~$13 million pre-tax profit.

The deal is yet to be approved by shareholders of the institutions, the central banks of Kenya and the DRC and other regulatory agencies.

The bank has nine branches in Kinshasa, four in the southern part of the country and sixteen others in the interior of the country (including Bukavu, Goma and Kisangani).  The main shareholders of BCDC are George Arthur Forrest  & family with 66.53% and the Government of DRC with 25.53%, as well as other shareholders who own 7.94% of the bank. In 2017, BCDC had deposits of $485 million, loans of $282 million and a pre-tax profit of $12 million, that was achieved despite challenges of currency fluctuations and bad debt provisions.

EDIT November 19: Equity Group will acquire 66.53% of BCDC by paying George Arthur Forrest $105 million for 625,354 shares, inclusive of dividends.

Equity Group plans to consolidate BCDC with Equity Bank Congo (EBC, formerly Procredit), and will pay KfW, the German development bank, $9 million for its 7.67% stake in EBC after KfW exercised a put option that the Government of DRC will have to approve.

Transaction advisors for the deal are Stanbic Bank Kenya and legal advisors are Anjarwalla & Khanna.

EDIT August 11, 2020: Equity Group announced the receipt of all approvals and completion of the deal on August 7. This was at a reduced price of $95 million, down from the earlier-announced $105 million to reflect the impact in COVID on world economies and the DRC. Equity now owns 66.53% of BCDC with the bank becoming a subsidiary of the Equity Group. 

African Banker Awards 2019 Nominees

The winners of the 2019 African Banker Awards will be announced on June 11 at the Annual Meetings of the African Development Bank (AfDB) in Malabo, Equatorial Guinea. 

Multiple nominees this year include Absa, the Trade & Development Bank, Equity Bank, and Standard Bank while first-time nominees include Family Bank of Kenya who partnered with Simba Pay to enable payments via WeChat to China, Kenya’s largest trading partner. There are also nominees for arranging sovereign Eurobonds and IPO’s, while UbuntuCoin, an asset-backed digital currency that was a finalist at last year’s awards, is nominated again.

The complete list of shortlisted nominees for 2019 are:

African Banker of the Year:  Admassu Tadesse (Trade and Development Bank), Brehima Amadou Haidara (La Banque de Développement du Mali), Brian Kennedy (Nedbank, South Africa), James Mwangi (Equity Bank, Kenya) and Johan Koorts (ABSA, South Africa).

Award for Financial Inclusion: 4G Capital (Kenya), Amhara (Ethiopia), Bank of Industry (Nigeria), Cofina (Senegal), Jumo (South Africa).

Best Retail Bank in Africa: Coris (Burkina Faso), Ecobank (ETI), Guarantee Trust Bank (Nigeria), KCB (Kenya), QNB AlAhli (Egypt).

Deal of the Year – Debt: Absa ($350M Old Mutual Renewable Energy IPP), Afrexim – ($500M ChinaExim Syndicated Loan), CIB ($389M Egyptian Refining Company), Rothschild ($2.2 billion Republic of Senegal Dual-Currency Eurobond), TDB ($1 billion Sovereign Loan to the Government of Kenya).

Deal of the Year – Equity:  Al Ahly (Canal Sugar Equity), EFG Hermes (ASA IPO), RenCap (CiplaQCIL IPO), Standard Bank / RMB (Vivo Energy IPO), Standard Bank IBTC (Flour Mills of Nigeria Rights Issue).

Infrastructure Deal of the Year: Absa (Enel Green Power), Afrexim (Syndicated Loan for EBOMAF/Government of Cote D’Ivoire), National Bank of Egypt (ElSewedy Electric Hydropower Project), RNB (Roggeveld Wind Power Project), TDB (Mozambique FLNG Project).

Innovation in Banking:  ABSA (South Africa), Family Bank (Kenya), KCB (Kenya), MCB Capital Markets (Mauritius), and Ubuntu Coin (Côte d’Ivoire).

Investment Bank of the Year: ABSA (South Africa), Coronation Merchant Capital (Nigeria), NedBank (South Africa), Rothschild, Standard Bank (South Africa).

Socially Responsible Bank of the Year: Access Bank (Nigeria), Bank Misr (Egypt), Equity Bank (Kenya), KCB (Kenya), Qalaa Holdings (Egypt).

Equity – Atlas Mara bank deal

Atlas Mara and Equity Bank Group announced an agreement for the exchange banking assets.

The deal will see Equity acquire Atlas Mara’s 62% shareholding in Banque Populaire du Rwanda  and Atlas Mara’s interests of 100% of BancABC Zambia, 100% of BancABC Tanzania and 100% of BancABC Mozambique in exchange for Atlas Mara receiving 252 million newly-created Equity shares worth $105 million (Kshs 10.7 billion). Through the deal, Equity expands its Africa footprint into two new countries of Mozambique and Zambia

This also came the day that Atlas Mara announced their financial results for December 2018 which ended with $2.8 billion assets and profit after tax of $34 million, which were slight declines partly attributed to reduced interest income, the enactment of IFRS9 and the economic situation in Zimbabwe.

The four banks combined constitute less than 2% of the revenue of Atlas Mara. They would all require capital and liquidity to support and will now be consolidated off the Atlas Mara balance sheet in the deal to be concluded by the end of the year. Atlas Mara will now continue to focus on core investments where they can be market leaders. In 2019, they plan on stabilizing the bank in Zimbabwe and increasing their 49.7% shareholding at Union Bank of Nigeria.

Also In the results announcement, Michael Wilkerson, the Executive Chairman of Atlas Mara wrote about being frustrated, liked other shareholders, that the company’s share prices did not represent its true value and that the new stake in Equity, digital banking leader, would help improve that. They also did a BankABC Bostwana IPO in December 2018 selling 25% of the bank to investors on the Botswana stock exchange.

EDIT: The Business Daily reported on October 9, 2019, that Equity got a $130 million (~Kshs 13 billion) discount on the purchase of the four banks from Atlas Mara whose prices were marked down after a due diligence exercise.

EDIT:  March 26 2020: Atlas Mara confirmed it was still in discussion with the  Equity Group but did not expect to conclude these in the early part of 2020. Atlas aims to publish their accounts by the end of April but has postponed their shareholders AGM set for May 2020, due to the Coronavirus scheduling impracticalities.

EDIT: June 23 2020:  Atlas Mara and Equity Group mutually agree to discontinue transaction discussions as Equity has changed strategy given the effects of the COVID-19 pandemic globally and on the economies in which EGH entities operate.

The statement by Atlas Mara reads that they remain committed to implementing the previously-announced strategic decisions which include streamlining the holding company structure and related costs, and exiting or partnering in certain countries.