KCB Group PLC has signed a definitive agreement with Atlas Mara to acquire Banque Populaire du Rwanda Plc (BPR) and African Banking Corporation Tanzania (BancABC). The proposed transaction will increase the bank’s regional footprint, as the bank group explores new group opportunities.
In the agreement, KCB will acquire a 62.06% stake in BPR. A cautionary notice reveals that the bank group plans to make an offer to the remaining shareholders at the same price applicable to the shares of Atlas Mara. The bank will also acquire a 96.6% shareholding from ABC Holdings Limited, a subsidiary of Atlas Mara, and make an offer to Tanzania Development Finance Company for the remaining 3.4% shareholding.
According to Group CEO Joshua Oigara, the transaction will boost its market share and distribution network in the two countries, increase its customer base and position it for long-term growth.
“Once the transaction is completed, the Group’s Rwanda and Tanzania businesses are expected to have stronger financial credentials to support business growth in the post-covid-19 macroeconomic recovery,”KCB Group CEO and MD Joshua Oigara
KCB will pay for both acquisitions in cash based on the asset value of the banks upon completion of the transactions, using the price-to-book multiple of 1.09 for BPR and 0.42 for BancABC.
KCB expects the BPR acquisition to double its market share, making it the second-largest bank in Rwanda behind the Bank of Kigali. Similarly, the Tanzania merge will bring its Tanzania subsidiary among the top ten banks, integrating its in-house retail and corporate banking franchise with BancABC’s retail and commercial operations.