This archive report was first published on 23 June 2020.
On Tuesday, Equity Group announced that it has abandoned plans to expand across East Africa by pulling out of negotiations to acquire Atlas Mara's (ATMA) banking businesses in Rwanda, Tanzania, Zambia, and Mozambique, as of the publication date June 23, 2020.
The decision was informed by the uncertainty of risk, which led to the proposed withdrawal of Ksh9.5 billion dividend payout to shareholders.
Equity Group CEO Dr. James Mwangi stated that the board has considered the events that have taken place since January 2020, when the two parties agreed to extend transaction discussions, and particularly the impact of the COVID-19 pandemic to the world and the economies in which Equity operates.
“After careful consideration, EGH and ATMA have mutually agreed to discontinue discussions on the transaction for the foreseeable future,” said Dr. Mwangi.
According to Dr. Mwangi, the board's decision is in line with its business continuity management, which speaks to risk assessment, approach to prudent risk mitigation and management in the prevailing economic slowdown occasioned by the COVID-19 pandemic in the region and globally.
Equity Group has stepped up the push to digital channels and growing the various non-funded income franchises while re-evaluating the acquisition of new businesses where significant capital injection and managerial attention is required.
