Equity Group Holdings (EGH) Plc has announced it has entered into a deal to acquire a majority stake in Banque Commercial du Congo (BCDC), the second-largest bank in the Democratic Republic of Congo (DRC).
This is happening as EGH steps up its ambitious geographical diversification strategy.
Equity Group Holdings Plc CEO and Managing Director, Dr. James Mwangi said, “ This is an opportunity for the Group to take further steps towards the delivery of 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.”
EGH has purchased a 66.53 per cent majority stake in Banque Commercial du Congo (BCDC), a bank licensed in the Democratic Republic of Congo (DRC).
This purchase Agreement specifies that EGH will pay a cash consideration of US$ 105 million for the 625,354 shares to be purchased inclusive of dividends declared after 1st January 2019 in respect of the financial year ending on 31 December 2019, at the price of US$ 167.9 per share.
EGH will pay for the majority shares held at BCDC by Mr. George Arthur Forrest, a financial institution licensed by the Banque Central du Congo in the DRC.
BCDC is a public limited company (société anonyme – S.A.) licensed by the Banque Central du Congo (the Central Bank of the Democratic Republic of Congo) to provide banking services in DRC.
The Bank traces its origins to 1909 when it was founded as Banque du Congo Belge. BCDC is the second largest bank in the Democratic Republic of the Congo as measured by balance sheet and shareholders’ equity.
“Mr. George Arthur FORREST is happy to conclude the transaction with EGH knowing that his legacy is in the hands of the fastest developing Bank in Sub-Saharan Africa, already present in DRC, with the aspiration and capacity to develop and grow the offerings and financing of BCDC,” said Dr Mwangi
EGH also proposes to increase its shareholding in its already existing subsidiary Equity Bank Congo S.A. (EBC).
In this regard, EGH shareholders approved the purchase by EGH of the shares held by Kreditanstalt Für Wiederaufbau (KfW) comprising 7.6 per cent of the issued share capital of EBC following the exercise of a put option granted to KfW under a Shareholders Agreement relating to EBC, entered into between among others EGH and KfW.
The proposed acquisition of the shares held by KfW is also subject to the approval of Banque Centrale du Congo. EGH will pay a cash price of US$ 9,061,721(KSh 915.2 Million)
Figures from Equity Group’s Q3 financials indicate that its balance sheet grew significantly by 20.8per cent to KSh 677.1 billion from KSh 560.4 billion in Q3’2018.
This growth was partly driven by the Group’s aggressive by mergers and acquisition activity.
Attention now shifts as EGH moves to seal a deal with Atlas Mara Ltd that will see it acquire bank assets in Rwanda, Zambia, Tanzania and Mozambique.
“By acquiring BCDC and the KfW stake in EBC, EGH will expand its footprint in DRC. The Group aims to provide access to competitive, tailored financial services to transform people’s lives and livelihoods, expand opportunities for wealth creation whilst also delivering significant value to its stakeholders,” said Dr Mwangi
EGH has subsidiaries in Uganda, DRC, Rwanda, Tanzania and South Sudan with a commercial representative office in Addis Ababa, Ethiopia set to commence operations in the second half of 2020.