This archive report was first published on 2 September 2021.
Published on September 2, 2021, I&M Group has spent Ksh4.1 billion ($37.2 million) to acquire a 90 percent stake in Uganda's Orient Bank Limited, with the cost rising from the initial estimate of Ksh3.6 billion ($32.7 million).
The Nairobi Securities Exchange-listed lender made the announcement after adjusting the base price to account for various factors, including the appreciation of the Ugandan shilling against the US dollar.
According to Gauri Gupta, who leads I&M's corporate advisory business, the cost as of the half year is Ksh4.1 billion ($37.2 million), and the final figure will be known by the end of the year.
The Kenyan banking multinational signed an agreement with the sellers to make price adjustments on account of exchange rates between the date of signing the deal and its completion.
I&M also agreed to meet the cost of post-completion integration support and to factor in Orient Bank's net loss or net profit for the period from January 1 until completion.
The sale of the subsidiary's property in Kampala, Orient Plaza, also weighs in on the transaction price.
As a result of the acquisition, I&M made a net profit of Ksh284.4 million ($2.5 million) in Uganda in the half year ended June, up from Ksh1.4 million ($12,723) the year before.
The acquisition has expanded I&M's operations in Uganda, giving it access to additional loans worth Ksh7.7 billion ($70 million), deposits ($165.4 million), 70,000 customers, 14 branches, and 22 ATMs.
