This archive report was first published on 2 September 2019.
On September 2, 2019, the Central Bank of Kenya (CBK) approved the acquisition of 100% shareholding in National Bank of Kenya (NBK) by KCB Group.
The approval, granted in accordance with Section 13 (1) (c) of the Banking Act, aims to strengthen both institutions by leveraging their respective domestic and regional corporate, public sector, and retail franchises.
However, the move has faced opposition from the National Assembly Finance and Planning Committee, which claims that KCB Group undervalued NBK's worth. The committee's report is yet to be tabled for debate.
High Court Judge Weldon Korir recently threw out a suit filed by Evans Aseto and John Kiptoo, seeking to stop the buyout on grounds that due process had not been followed. The judge stated that there was no evidence to support this claim.
The deal had received the nod of the Capital Markets Authority and the Competition Authority of Kenya. KCB met the threshold to acquire NBK after receiving acceptances of over 262 million shares out of the more than 338 million NBK shares, amounting to 77.6% of NBK shares being accepted as part of the share swap deal.
Kenya's largest lender by assets needed a 75% threshold of new shareholders coming on board for it to declare the transaction a success. NBK shareholders had until Friday, August 30, to accept the KCB offer, but majority of the 55,000 small shareholders were reluctant due to the controversy surrounding the lender's valuation.
While KCB plans to pay Ksh 6 billion for the 100% stake or 10 NBK shares for one KCB share, independent advisors valued the bank at Ksh 9.0 billion, with the
