KCB Group has entered into a sale agreement with Atlas Mara (ATMA) that will see the Kenyan lender acquire the latter’s banking operations in Rwanda and Tanzania.
Under the deal, KCB will acquire a 62.06% stake in Banque Populaire du Rwanda Plc (BPR) and a 100% stake in African Banking Corporation Tanzania Limited (BancABC) from ATMA in Rwanda and Tanzania, respectively.
In a statement made Thursday, KCB Group CEO Joshua Oigara said the deal will help strengthen the lender’s business footprint in the region.
“The transaction fits within the Group’s expansion strategy and will see us increase our market share and distribution network across Rwanda and Tanzania and improve our operating leverage by enabling us to deliver our existing product offerings to a wider base of customers while positioning the bank for sustainable growth in the long-term, ” said Oigara.
Acquisition of stakes in BPR will effectively place KCB Group as the second largest bank in Rwanda while full control of BancABC by KCB Tanzania, a subsidiary of the group, will strengthen its retail and commercial banking operations and putting it among the top 10 banks in Tanzania.
KCB will pay cash consideration for the BPR Shares determined based on the net asset value of BPR at the completion of the transaction and using a price to book multiple of 1.09x.
In addition, KCB intends to make an offer to the remaining Shareholders of BPR to acquire additional shares from the remaining shareholders.
The group will offer the same acquisition price applicable to the shares to be acquired from Atlas Mara Mauritius which is a wholly-owned subsidiary of ATMA.
In Tanzania, KCB has proposed to pay cash consideration determined based on the net asset value of ABC which owns BancABC.
The group which operates in six East Africa countries has the largest branch network in the region with 360 branches with an asset base of Kshs. 972 billion as of September 2020.
The two transactions will however be subject to regulatory approvals from regulators in Kenya, Tanzania, and Rwanda.