This archive report was first published on 24 June 2020.
On June 24, 2020, Equity Bank Group announced that it had called off its plan to acquire four regional banking subsidiaries from London-listed Atlas Mara Limited in a move aimed at preserving its capital in the wake of the Covid-19 pandemic.
The parties had initiated talks in April 2019, but the negotiations targeting Atlas Mara's units in Rwanda, Zambia, Tanzania, and Mozambique dragged on until the pandemic hit.
Equity Bank Group had planned to acquire 62 percent of the share capital of Rwanda's Banque Populaire du Rwanda and 100 percent of African Banking Corporation of Zambia, African Banking Corporation Tanzania, and African Banking Corporation Mozambique.
The deal was to be paid for through Equity shares equivalent to a 6.72 percent stake valued at about Sh10.6 billion, but the loss-making subsidiaries would have needed substantial capital injection from the Kenyan bank.
Equity Bank Group cited the need to refine its strategy given the Covid-19 pandemic as the reason for calling off the deal.
Instead, the bank will focus on conserving cash and liquidity and deploying it to support customers in existing businesses.
Equity Bank Group had previously cancelled its proposed dividend payout of Sh2.50 per share or a total of Sh9.4 billion after the pandemic forced it to restructure Sh92 billion of loans to customers hurt by the economic disruption.
