Equity Group Holdings Plc (NSE: EQTY) is in talks with some of Banqué Commerciale du Congo’s (BCDC) shareholders to buy a controlling stake in its strategic expansion in Central Africa.
This is “…with a view to eventually amalgamating the business of BCDC with that of EGH’s existing banking subsidiary in DRC, Equity Bank Congo,” said Dr. James Mwangi, chief executive, Equity Group on Monday through a statement.
BCDC is licensed by the Central Bank of Congo to provide banking services in DRC. It is the second-largest bank in the country.
“By acquiring BCDC, EGH will be able to expand its footprint in Africa. Further, through the Proposed Transaction, EGH aims to provide access to competitive, tailored financial services to improve people’s lives and livelihoods whilst also delivering significant value to its stakeholders,” said Dr. Mwangi.
BCDC is majority-owned by Belgian entrepreneur George Arthur Forrest and family (66.53 per cent) and the government of the DRC (25.53 per cent), while the remaining 7.94 per cent shares are owned by other minority shareholders.
“The Proposed Transaction is an opportunity for EGH to deliver the vision of building sub-Saharan Africa’s premier financial institution through delivering innovative products and services to customers, including, in particular, the effective use of technology,” he added.
Equity Bank announces that it has entered into discussions with certain shareholders of BCDC DRC (most likely the George Arthur Forrest family) to acquire controlling stake.The transaction,if consummated,will see Equity Bank become the second largest bank in the DRC after Rawbank
— George Bodo (@GeorgeBodo) September 9, 2019
In 2018, Equity invested a stake in ProCredit Bank.
At the end of the financial year 2018, the DRC constitutes 8% of Equity Group’s revenue, second behind Kenya’s 75% and ahead of Uganda, Tanzania and Rwanda. The DRC subsidiary had $558 million in assets, accounting for about half of its regional subsidies, with ~$13 million pre-tax profit.
In May 2019, Equity Group announced its intention to acquire certain banking assets of Atlas Mara (ATMA): 62.0% shareholding in BPR Rwanda, and (ii) 100.0% shareholding in ABC Zambia, ABC Tanzania, and ABC Mozambique.
The transaction is set to establish new markets in the form of Zambia and Mozambique for Equity Group as well as strengthen existing markets in Rwanda and Tanzania.
Equity has an ambitious plan to grow its regional footprint to 10 countries by the year 2020 and then expand to 15 countries by the year 2024 pic.twitter.com/QAL9DbCq4Q
— Equity Bank Kenya (@KeEquityBank) August 3, 2019