Equity Spends Ksh6.7 Billion To Acquire 92% Stake In Rwanda’s 5th Largest Bank
Equity Group Holdings Plc has entered into an agreement with the Government of Rwanda, Rwanda Social Security Board, Sanlam Vie Plc and Ms Judith Mugirasoni for the purchase of 91.93% of the issued shares in the capital of Compagnie Generale De Banque (Cogebanque) PLC Ltd.
The acquisition is aimed at eventually amalgamating the business of Cogebanque with that of Equity Group’s existing banking subsidiary in Rwanda, Equity Bank Rwanda Plc.
In a statement, Equity announced that it intends to make an offer to the remaining shareholders to acquire all their shares in Cogebanque with the intent of becoming the holder of 100% of the issued shares of Cogebanque.
“Completion of the Cogebanque Acquisition is subject to conditions that are customary to transactions of this nature including completion of confirmatory due diligence, signature of definitive agreements, receipt of all regulatory approvals from, amongst others, the Central Bank of Kenya, Banque Nationale du Rwanda (BNR), the COMESA Competition Commission and receipt of all applicable board and shareholder approvals,” Equity CEO James Mwangi said.
On completion, Cogebanque will become a subsidiary of EGH.
Cogebanque is a public limited company licensed by the BNR to provide banking services in Rwanda. At the end of 2022, Cogebanque was the fifth largest bank in Rwanda as measured by reported book value of total assets and shareholders’ equity
Cogebanque serves customers in the corporate, small- and medium-sized enterprise and retail customer segments through 28 branches, approximately 600 active bank agents and 36 automated teller machines.
In its audited financial statements for the year ended December 31, 2022, Cogebanque had net assets of RWF 47,351,179,000 (approximately Ksh5.8 billion)and profit after tax of RWF 9,056,876,000 (Ksh1.1 billion).
The Binding Term Sheet specifies that EGH will pay a cash consideration of RWF297,406 (Ksh34,280) per ordinary share for the 183,854 ordinary shares to be purchased. This will amount to RWF 54.7 billion (Ksh6.7 billion).
Equity will be entitled to all dividends declared after January 1, 2023, other than the final dividend for the year ended December 31, 2022, of RWF15,000 (Ksh1840) per ordinary share that Cogebanque declared in May 2023 that will be paid to the current shareholders of Cogebanque before completion of the Cogebanque Acquisition.
The agreement further provides that the Government of Rwanda, or its nominee, will purchase Cogebanque’s head office building from Cogebanque or its successor entity within twelve months of completion of the Cogebanque Acquisition for consideration that results in net after-tax proceeds of RWF11,488,000,000 (Ksh1.4 billion).
“By acquiring Cogebanque, EGH will be able to expand its footprint and consolidate its position in Rwanda. Further, EGH through the combined businesses of Equity Bank Rwanda Plc and Cogebanque, aims to provide even better access to competitive, tailored financial services to improve lives and livelihoods of the people of Rwanda, expand opportunities for wealth creation whilst also delivering significant value to its stakeholders,” Mwangi said.
“The Cogebanque Acquisition is also an opportunity for EGH to take further steps towards the attainment of its vision of being Sub-Saharan Africa’s premier financial institution through delivering innovative products and services to customers, including, in particular, the effective use of technology. Until further announcements regarding the Cogebanque Acquisition are made, the shareholders of EGH and other investors are advised to exercise caution when dealing in EGH ordinary shares on the Nairobi Securities Exchange, the Uganda Securities Exchange and the Rwanda Stock Exchange.”