Atlas Mara acquisition by Equity Group has flopped as the two firms have mutually agreed to discontinue acquisition transaction discussions citing the need to refine EGH’s strategy given the COVID19 pandemic.
Equity Group proposed to acquire Atlas Mara banking assets in Rwanda, Tanzania, Zambia, and Mozambique. In exchange, Atlas Mara was to get shares in Equity Group.
In January 2020, Equity Group published an update saying that the two firms were yet to sign a detailed transaction agreement and the binding term sheet with respect to the proposed transaction had expired. At the time, Equity Group remained optimistic that the two firms would pursue further discussions in early 2020 to try to reach mutually acceptable commercial terms.
Equity Group says discontinuation of the transaction was due to the effects of COVID19 pandemic to both the world and economies in which it operates. In this case, the bank says it has refined its strategy to take into account the COVID-19 pandemic.
Strategic measures to wade through the uncertainity include;
- Conserving cash and liquidity including the non-declaration of dividend for the financial year ended 31 December 2019
- Deploying support to customer in existing businesses
- Focus on accelerating the push to digital channels
- growing Equity Group’s various non-funded income franchises
- Re-evaluating the acquisition of new businesses where significant capital injection and managerial attention is required