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Equity’s Shs396bn Deal To Buy Four Banks Across Africa Collapses

Equity Group Holdings (EGH)’s plans to acquire banking assets of Atlas Mara in four African hangs in balance after binding transaction agreements between the two parties expired.

On 29 April 2019, EGH announced that it had entered into a binding term sheet (the Binding Term Sheet) pursuant to which EGH had agreed to exchange certain banking assets of Atlas Mara Limited (ATMA) in four countries for shares in EGH as follows: (i) 62% of the share capital of Banque Populaire du Rwanda Plc (BPR); (ii) 100% of the share capital of African Banking Corporation Zambia Limited (ABCZam); (iii) 100% of the share capital of African Banking Corporation Tanzania Ltd (ABCTz); and (iv) 100% of the share capital of African Banking Corporation (Moçambique), SA (ABCMoz) (the Proposed Transaction).

The announcement stated that the Proposed Transaction was subject to completion of confirmatory due diligence, the entering of detailed transaction agreements and obtaining regulatory and shareholder approvals.

However, in a statement dated 31st December, 2019, Dr. James Mwangi, Group Managing Director and Chief Executive Officer at Equity Group Holdings Plc, said the parties have yet to sign detailed transaction agreements and the Binding Term Sheet has expired.

“… EGH and ATMA expect to continue further discussions in early-2020 to try to reach mutually acceptable commercial terms with respect to the Proposed Transaction, or a variant of it. There is currently no certainty that a transaction will materialize,” Mwangi (pictured) said.

He added: “EGH remains committed to its strategic objective of expanding its footprint in Africa to provide access to competitive, tailored financial services to improve people’s lives and livelihoods whilst also delivering significant value to its stakeholders and to its vision of building sub-Saharan Africa’s premier financial institution through delivering innovative products and services to customers, including, in particular, the effective use of technology.”

He added that EGH will make further announcements upon conclusion of any fresh binding transaction agreements.

“Until further announcements regarding the Proposed Transaction are made, the shareholders of EGH and other investors are advised to exercise caution when dealing in EGH ordinary shares on the Nairobi Securities Exchange, the Uganda Securities Exchange and the Rwanda Stock Exchange,” he said.

. Atlas Mara is a financial services company listed on the London Stock Exchange.

Equity  was expecting to allot approximately 252,482,300 new ordinary shares. The monetary value of the consideration to be paid was the equivalent of approximately KShs10.7 billion (UShs396.8 billion).

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