Two weeks after acquiring African Banking Corporation of Botswana Limited (BancABC Botswana), Herbert Wigwe’s Access Bank is about to acquire another Bank from depressed Atlas Mara.
Access Bank reached an agreement with Atlas Mara to purchase African Banking Corporation Zambia Limited, making it the fourth bank Wigwe will be acquiring in a space of two years.
The Nigerian lender didn’t disclose the worth of the deal, but stated that the acquisition will not be funded with significant additional capital investment due to the merger of Access Bank Zambia and Cavmont Bank in 2020.
Wigwe bets shareholders’ investment on markets Atlas Mara wants nothing to do with
This is the second deal between the Herbert Wigwe-led firm and Bob Diamond’s Atlas Mara, which has been scaling down its investment in its core market, in sub-saharan Africa.
While Atlas Mara is intensifying its exit from the Botswana and Zambian markets, the Nigerian investment banker is double downing his efforts in these countries through subsidiaries, Access Zambia and Access Botswana.
Wigwe has put his faith in the same companies that Atlas Mara has been trying to sell off since 2019, but struggled to convince buyers like Equity Group – largest banking outfit in East Africa, and owned by James Mwangi – to take it up.
After about 14 months of negotiation, Equity Group, Ripples Nigeria understands, backed out of acquiring series of banks from Atlas Mara, two of which were BancABC Botswana and Zambia.
Explaining the reason its deal fell through, Atlas Mara said it was largely due to change in EGH’s (Equity Group parent company) strategy, induced by Covid-19 pandemic effects on the economies where the prospective buyer operates.
When EGH backed out of the deal, oil price was down to around $40 per barrel in June, but as of today, Brent Crude sells for $86.11. While EGH did not see the deal worthy to sign, Wigwe in a statement to NGX said it sees, “prospects of increased earnings contribution” and have “strong confidence” in the Zambian market and COMESA region.
Atlas Mara, was in a depreciating position following investors disinterest in the firm, whose goal had been to conquer sub-saharan African banking industry, when it launched in 2013 – but eight years later, all it wants is to get out of the continent’s market.
Atlas Mara’s struggles was reflected in its depreciating stock value, which was down to $0.20 per share as of October 26, 2021, against the $9.83 it traded on the London Stock Exchange when it conducted its IPO launch in mid-December 2013.
Aside from the sale of BancABC subsidiaries to Access Bank, Atlas Mara is also looking to offload Union Bank, as it plans to completely do away with African banks – and Wigwe is also reportedly one of the bank heads looking to takeover from Diamond’s firm.
The acquisition of BancABC Zambia, which is meant to be completed in 2022, will take Access Bank Zambia’s total asset valuation to $I billion in total assets, managing 70 branches and agencies in the East African country.
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