KCB Group terminates its pursuit of Tanzania lender
KCB Group will not acquire Tanzania’s African Banking Corporation (ABC Tanzania) after all, following delay in getting regulatory approvals from Bank of Tanzania.
In an advert in the national dailies yesterday, KCB Group said the parties had failed to agree on the extension of the transaction talks, hence termination of the proposed acquisition.
“As of the date hereof, certain regulatory approvals have not been received within the prescribed timeframe specified in the agreement. As a result, without further agreement by the parties to extend the long stop date, the agreement has been terminated and, accordingly, the parties will not proceed to complete the transaction as previously envisaged,” KCB Group said in a statement.
A ‘Longstop Date’ is an established practice in mergers and acquisitions transactions where parties agree on a timeframe in which all the conditions precedent for a transaction need to be fulfilled before the transaction is completed.
In November last year, the lender said it had entered a binding agreement to buy a controlling stake in Banque Populaire du Rwanda and take full ownership of ABC Tanzania at a combined value of $40 million (Sh4.5 billion).
Under the deal
KCB Group chief financial officer Lawrence Kimathi told the news conference that under the deal, KCB would pay $32 million (Sh3.6 billion) for the BPR shares and $8 million (Sh901 million) to fully acquire ABC Tanzania, an acquisition that Group Chief Executive Joshua Oigara said would lift KCB into the top 10 banks in Tanzania.
Both BPR and ABC Tanzania are owned by the London Stock Exchange listed Atlas Mara Limited co-founded by former Barclays boss Bob Diamond, its CEO until February 2019.
The setback has not deterred the bank from pursuing regional footprint and growth strategy which the bank says is part of the cornerstones of its ambitions.