This archive report was first published on 23 June 2020.
On June 23, 2020, Equity Group Holdings announced that it had mutually agreed with Atlas Mara (ATMA) to discontinue discussions on a proposed takeover of banking businesses in Rwanda, Tanzania, Zambia, and Mozambique.
The decision was made due to the uncertainty of risk, which led to the proposed withdrawal of a Kshs 9.5 billion dividend payout to shareholders.
Equity Group had initially expressed interest in acquiring banking businesses from ATMA in January 2020, but the two parties were unable to reach a mutually acceptable agreement.
Speaking on the decision, Dr. James Mwangi, Managing Director and CEO of Equity Group, stated, “The Board has considered the events that have taken place since January 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 EGH operates. After careful consideration, EGH and ATMA have mutually agreed to discontinue discussions on the transaction for the foreseeable future.”
Dr. Mwangi emphasized the importance of risk assessment and prudent risk mitigation in the current economic climate, stating, “A strong capital and liquidity position gives us the strength and capacity to cushion our business, accommodate and walk with our customers during these challenging times.”
Equity Group has instead focused on accelerating its digital transformation and growing its non-funded income franchises, while re-evaluating potential acquisitions that require significant capital injection and managerial attention.
