Equity Group cancels US$89m Atlas Mara acquisition deal over Covid-19 Pandemic

AFRICA – Equity Group Holdings has terminated acquisition talks for Atlas Mara Limited’s (ATMA) banking units in Zambia, Mozambique, Tanzania and Rwanda.

In a media statement, the group said the decision is consistent with the board’s view of the uncertainty of risk, which precipitated the proposed withdrawal of the US$89.2 million dividend payout to shareholders.

According to Equity Bank Group CEO James Mwangi, the board considered the unfolding events since January when the two parties agreed to extend transaction discussions and particularly the impact of the COVID-19 pandemic globally and the economies in which Equity Group operates.

”After careful consideration, Equity Group and ATMA have mutually agreed to discontinue discussions on the transaction for the foreseeable future,’’ Mwangi said.

He added that the board’s decision is in line with its business continuity management that looks at risk assessment, approach to prudent risk mitigation and management in the prevailing economic slow-down occasioned by the COVID-19 pandemic in the region and worldwide.

In mid-January, Equity Bank Group had announced an extension of discussions with ATMA following the expiry of the transaction period before the two parties could sign a detailed transaction agreement.

During the extended period, the two parties were to continue further discussions to try and reach mutually acceptable commercial terms with respect to the proposed transaction or a variant of it.

The cancellation of the planned share swap once again slows Equity’s ambitious pan-Africa expansion strategy, which it had put on hold in 2016.

ATMA was, on successful completion of the agreement, be allotted a 6.27 per cent stake, or 252,482,300 shares in Equity in a share swap whose value has been put at US$105.71 million.

Successful execution of the deal would have seen Equity enter Zambia and Mozambique by acquiring ATMA’s 100 percent shareholding in ABCZam and ABCMoz, respectively.

It could have also expanded its wings in Tanzania by buying out ABCTz, while in Rwanda it would have taken over a 62 per cent stake in BPR currently controlled by ATMA.

Mwangi said the bank is now focused on conserving cash and liquidity and deploying it to support its customers to survive the economic crisis and recover and thrive post the crisis.

”A strong capital and liquidity position gives us the strength and capacity to cushion our business, accommodate and walk with our customers during these challenging times,’’ Mwangi said.

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