Access Bank to acquire 83% stake for $37m
By Jeph Ajobaju, Chief Copy Editor
Access Bank Nigeria is on the cusp of acquiring 83.4 per cent equity stake in Sidian Bank of Kenya held by Centum Investment Company (‘Centum’), having entered into a “binding agreement” on the $37 million deal.
Sidian will merge with Access Bank Kenya to create a stronger banking institution better positioned to serve the market in Kenya and in the East African corridor, according to Access Bank Holdings (ABH) which owns Access Bank Nigeria.
ABH Company Secretary Sunday Ekwochi explained in a statement that the purchase is approximately N15 billion ($37 million), a price to book multiple 1.1x based on the audited 31 March 2022 shareholders equity of Sidian.
“The growth transaction being implemented in Kenya represents the relentless focus and execution of our strategic objectives within our banking subsidiary even as we grow the other businesses within Access Corporation’s core segments,” Access Corporation Group Chief Executive Herbert Wigwe said in the statement.
“The acquisition of Sidian is a significant step-up in scale and potential for Access Bank in Kenya which represents the largest market and trade corridor in East Africa.
“The significant increase in scale and customer base presents us with enormous opportunities to support growth in the various ecosystems we are building in our trade and payment business.
“The economies of scale that derive therefrom will continue to drive and enhance contributions to all stakeholders.”
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Promoting cross border banking
“This transaction builds on our earlier acquisition of the former Transactional Bank Plc (now Access Bank Kenya) and underscores our resolve to strengthen our presence in Kenya, a key African market that fits into our strategic focus for geographic earnings growth and diversification,” Access Bank Chief Executive Officer Roosevelt Ogbonna said in the statement, per reporting by Nairametrics.
“The acquisition and intended subsequent merger will create a strong and competitive balance sheet for Access Bank in Kenya, positioning us to be well placed to promote regional trade finance and other cross border banking services in the East African Community (EAC) and broader COMESA region.
“The proposed combination with Access Bank Kenya would undoubtedly propel Access Bank into a strong contender in the Kenya market with enhanced capacity to play a more impactful role in the growth of its economy while delivering increased profitability for our shareholders.”
East African acquisitions
The transaction is subject to regulatory approvals in Kenya and Nigeria. If it goes through, it will be the second acquisition in Kenya for Access Bank, which in 2020 acquired Transnational Bank, now Access Bank Kenya.
Access Bank Zambia entered into a definitive agreement with Cavmont Capital Holdings Zambia (CCHZ) in August 2020 for the acquisition of Cavmont Bank, a subsidiary of CCHZ.
The subsequent merger transferred the operations of Cavmont Bank to Access Bank Zambia.