This archive report was first published on 9 October 2019.
On October 9, 2019, Equity Group announced that it would acquire four banks in Rwanda, Zambia, Mozambique, and Tanzania from Atlas Mara Limited, a London-listed investment group, in a deal that would see the Kenyan lender offer 6.72 percent of its shares worth Sh10.9 billion to Atlas Mara.
The valuation of the four banks dropped by more than half, reflecting weak earnings by Atlas Mara, which had marked down the value of the banks after Equity Bank's deal prompted a due diligence on their financial health.
Equity Bank will 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 is expected to give Equity Bank a piece of the Zambia and Mozambique market, adding to its current presence in Kenya, Tanzania, Uganda, South Sudan, Rwanda, and the Democratic Republic of Congo (DRC).
Equity Bank will merge its subsidiaries in Rwanda and Tanzania with those of Atlas Mara, a move that will help it reduce costs and enhance scale.
The four banks to be acquired by Equity had a total of 2,641 employees in 2018, a customer base of 822,000, and a loan book of Sh51.8 billion in the same period.
Atlas Mara reported a net loss of nearly Sh13.1 billion in the half year ended June, mainly due to the re-measurement of the value of the four banks, which resulted in a loss of $125.6 million (Sh13 billion).
